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Issue Brief

H.R. 1 Jeopardizes Californians’ Access to Behavioral Health Care and Key State Reforms

Federal Cuts to Medi-Cal Weaken Behavioral Health Supports for Children, Adults, and People Experiencing Homelessness

November 2025 | By Monica Davalos and Adriana Ramos-Yamamoto

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key takeaway

California’s behavioral health system depends on Medi-Cal to serve adults and children. Changes under H.R. 1 threaten Medi-Cal’s core funding and eligibility, putting at risk the state’s investments in behavioral health and housing and leaves more Californians without access to needed care.

California has made historic progress in transforming its behavioral health system, ranging from expanding access, integrating care, and linking success with housing and community supports. But looming federal cuts to Medi-Cal (California’s Medicaid program), enacted under H.R. 1 — the harmful Republican mega bill — threaten to strip care away from children, youth, adults, and older Californians, causing lasting harm and long-term costs for California communities.

More than one in three Californians rely on Medi-Cal for essential health care, including life-saving behavioral health services, which encompass mental health care and substance use disorder treatment. These services are critical at every stage of life — from school-based mental health services for kids to care for adults navigating trauma, chronic illnesses, or recovery.

Yet, H.R. 1 has implemented Medicaid cuts, harmful red tape and administrative barriers, and discriminatory restrictions based on age or immigration status, undermining the very foundation of care millions of Californians need.

The erosion of coverage and Medi-Cal funding restrictions could also destabilize the major interconnected behavioral health reforms state leaders have advanced in recent years, such as CalAIM, BH-CONNECT, the Children and Youth Behavioral Health Initiative, and the voter-approved Behavioral Health Services Act (BHSA), each of which heavily rely on leveraging federal dollars.

As Medi-Cal enrollment is poised to decline, the effects will be felt across California’s behavioral health system and these key reforms. Counties and health providers will lose critical Medi-Cal reimbursements that sustain community-based services, which will lead to weakened capacity and even more forced reductions in care. In practice, H.R.1 threatens to erode the behavioral health system from both sides — reducing coverage while stripping away the funding needed to continue serving those who remain — leaving Californians with mental health and substance use needs with even fewer pathways to treatment.

These harmful consequences also extend beyond health care. Federal cuts and restrictions will weaken California’s homelessness response by making it harder for unhoused people with behavioral health needs to access and maintain Medi-Cal funded services that help them find and keep stable housing. They may also impair the state’s ability to pair state funds with federal dollars to bridge behavioral health and housing supports, disrupting the continuity of care and housing for many.

Ultimately, as Medi-Cal faces deep reductions, with millions of people poised to lose coverage, so too will the services that support Californians’ health, housing, and well-being. This report provides an overview of who California’s behavioral health system serves, why Medi-Cal is integral to its success, and how the Republican mega bill, H.R.1, could undermine key state reforms. As state leaders confront these challenges, it’s critical for policymakers to protect proven policies, reduce harm, and ensure all Californians receive the essential care they need to be healthy and thrive.

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Key Terms

Californians of All Ages and Backgrounds Need Behavioral Health Care

Medi-Cal is the foundation of California’s behavioral health system, providing mental health and substance use treatment for Californians of all ages. In 2023, over half of all people enrolled in Medi-Cal — roughly 8.25 million people or every 1 in 5 Californians — accessed mental health services.

Adults

Nearly 1 in 5 California adults experience some form of mental illness, and about 1 in 20 have a serious mental illness that makes it difficult to carry out daily activities. Substance use disorders are also notable, affecting roughly 1 in 6 adults in the state. However, these conditions often overlap, with 1 in 14 California adults experiencing both a mental illness and a substance use disorder. People with co-occurring conditions often face greater barriers to care and benefit most when services are integrated and address both needs together. In 2021-22, nearly 345,000 adults over the age of 21 had at least one Medi-Cal Speciality Mental Health Services visit, reflecting how essential Medi-Cal has become in serving Californians with the most acute need to care.

For adults experiencing homelessness who have a behavioral health condition, Medi-Cal is often the only pathway to consistent care and stability. Among unhoused Californians, roughly 75% were covered by Medi-Cal, although even more are likely to qualify. Data quantifying the number of unhoused people with behavioral health conditions are not precise, but there is strong evidence that homelessness can trigger or worsen mental health conditions and push people toward coping behaviors like substance use. The UCSF Statewide Study of People Experiencing Homelessness found that over 80% of participants had experienced a mental health condition for a significant period of time that impaired their life function, mainly anxiety or depression, and nearly 65% reported using substances regularly at some point. These issues often co-occur, but the full extent is not reported.

Children and Youth

Medi-Cal covers every 3 in 7 California children, providing critical behavioral health care for those facing anxiety, depression, or trauma. In 2021-22, 5.8 million children and youth under the age of 21 were eligible for Medi-Cal Specialty Mental Health Services in California, and more than 246,000 received care. In 2024-25 alone, California schools received over $1 billion in Medi-Cal payments for services rendered to students, which includes school-based mental health services.

Still, the need continues to grow. Previous research shows that 1 in 14 children has an emotional disturbance that limits daily functions, a figure likely higher today given the lasting effects of the COVID-19 pandemic on children’s mental health. A recent survey found that 94% of Gen Z youth reported having mental health challenges in a typical month, with youth of color and LGBTQ+ youth reporting very high rates of stress and fear of discrimination.

These challenges are also not carried equally. Black, Latinx, Native American, and Pacific Islander children and youth face the highest rates of serious emotional disturbances because of the compounding factors that increase the risk of behavioral health conditions. This includes the effects of generational trauma, economic insecurity, barriers to care, and the impacts of historical and ongoing racism and discrimination towards them and their families.

Despite the great need for increased behavioral health services, new cuts and restrictions to Medicaid will limit access to life-saving care.

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H.R. 1 and the Federal Budget

H.R. 1, the harmful Republican mega bill passed in July 2025, will deeply harm Californians by cutting funding for essential programs like health care, food assistance, and education.

See how California leaders can respond and protect vital supports.

Learn More

Recently Enacted Harmful Republican Mega Bill, H.R. 1, Will Impede Californians’ Access to Behavioral Health Care

Medi-Cal is the backbone of public mental health and substance use services in California. Federal matching funds — drawn down through Medi-Cal reimbursements — form the core of financing for behavioral health care, which counties administer and deliver throughout the state.

In July 2025, Republicans in Congress and the Trump Administration enacted H.R. 1, a sweeping law that delivers the deepest health care cuts in U.S. history. The bill slashes roughly $1 trillion from Medicaid over the next decade. For California, the consequences are especially severe. As many as 3.4 million Californians could lose Medi-Cal coverage and the state could lose up to $30 billion in federal Medicaid funding each year.

These cuts will destabilize Medi-Cal and threaten core health services, including behavioral health care, in two major ways. The new law:

  • Imposes financing restrictions that strip billions of dollars in federal support to states.
  • Creates eligibility and access barriers that make it harder for Americans to enroll in and keep their coverage.

No matter the mechanism, these changes amount to deep cuts that will ripple across all Medi-Cal services and hit behavioral health care especially hard.

How H.R.1 Financing Restrictions Will Impact Californians with Behavioral Health Conditions

California has long used provider taxes — most notably the Managed Care Organization (MCO) tax — to raise state revenue that is then matched with federal Medicaid dollars. These revenues sustain Medi-Cal and support behavioral health services.

H.R. 1 undermines this model by banning new provider taxes and imposing rules that invalidate California’s current MCO tax structure. The law also caps provider tax rates over time and lowers the federal cap on Medicaid managed care payments, further restricting California’s ability to draw down federal funds.

While not all provider tax revenues are dedicated to behavioral health, Proposition 35 (approved by voters in 2024) earmarks a portion of MCO tax revenue for behavioral health facilities, workforce expansion, and other investments in mental health and substance use treatment. With H.R. 1 now law, these investments are at risk because California’s MCO tax is out of compliance with new federal restrictions.

If provider tax revenues are significantly reduced or eliminated, California will face major budget shortfalls that threaten Medi-Cal coverage and funding streams counties and providers depend on. The result: less revenue, fewer federal matching dollars, and diminished resources for behavioral health care — particularly in communities that already face barriers to treatment.

How H.R. 1 Eligibility and Access Restrictions Will Limit Behavioral Health Coverage for Californians

H.R. 1 introduces sweeping eligibility and access restrictions that will push Californians off Medi-Cal and disrupt reliable coverage for behavioral health services. Losing Medi-Cal coverage could disrupt access to psychiatric medications, counseling, and treatment programs, heightening the risk of crisis, hospitalization, or incarceration. The new law:

  • Excludes immigrant groups from Medi-Cal coverage. Refugees, asylees, humanitarian parolees, trafficking survivors, and other immigrants previously eligible under humanitarian protections will lose Medi-Cal, which would take away access to Medi-Cal behavioral health care from some of the most vulnerable people in the state.
  • Imposes burdensome work requirements for adults in the Affordable Care Act (ACA) expansion population, which could result in 3 million adults in California losing Medi-Cal coverage. These reporting requirements create barriers for people with a behavioral health condition who may struggle to maintain steady employment and complete complex paperwork. The barriers posed are especially acute for people experiencing homelessness. While exemptions exist — for example, for individuals considered “medically frail” due to a disabling mental health condition or substance use disorder — it remains unclear how these will be applied or what documentation will be required.
  • Increasing Medi-Cal eligibility checks for adults in the ACA expansion population, which will make it more challenging for them to maintain their Medi-Cal coverage even if they remain eligible. Disruptions in coverage can interrupt treatment plans and destabilize recovery for people managing chronic mental health or substance use conditions.
  • Limits retroactive Medi-Cal coverage from 3 months to 1 month for ACA expansion adults and to 2 months for all other adults. This change may leave people who enter treatment during a behavioral health crisis, such as a psychiatric emergency or overdose, without financial protection for care received before enrollment.

Overall, this new law will not only strip health coverage from millions of Californians but also undermine the stability of the behavioral health care system. People with mental health conditions and substance use disorders depend on stable, continuous access to care. Under H.R. 1, more people are likely to lose access to healthcare coverage, experience worse health outcomes, and turn to emergency rooms as substitutes for care.

Note: The ACA expansion population refers to adults under age 65 without dependents who qualify for Medi-Cal based on income (up to 138% of the federal poverty level) and immigration eligibility criteria. California fully implemented this expansion in 2014 under the Affordable Care Act.

The consequences of these cuts to financing, as well as eligibility and access, will have a significant impact on the health care system. As Medi-Cal enrollment declines, so too will reimbursements that counties and providers depend on to sustain behavioral health services. This loss of revenue will weaken provider capacity, reduce the availability of community-based programs, and further strain county behavioral health systems that are already stretched thin. 

In effect, H.R. 1 squeezes the system from both sides — fewer people insured and fewer dollars to care for those who remain — leaving Californians with mental health and substance use needs with even fewer pathways to treatment.

H.R. 1 Puts Interconnected State Behavioral Health Initiatives At Risk

H.R. 1 jeopardizes California’s significant behavioral health reforms that were designed to support the state’s most vulnerable residents and are fundamentally dependent on Medi-Cal’s flexibility and federal funding. This includes efforts such as CalAIM, BH-CONNECT, the Children and Youth Behavioral Health Initiative (CYBHI), and voter-approved reforms to the Behavioral Health Services Act (BHSA). Each is a strategic, interconnected effort designed to create a more equitable and coordinated system of care that supports the well-being of vulnerable Californians.

Initiatives like CalAIM and BH-CONNECT rely on federal waivers to use Medicaid funding for flexible purposes such as housing navigation. While the federal government has the authority to rescind or modify waivers or withhold funding, doing so would require navigating complex legal and administrative processes. Plus, such actions could provoke legal challenges from state officials and advocacy organizations.

However, by weakening Medicaid financing and eligibility, H.R. 1 still undermines the financial foundation that makes all of these initiatives possible. It threatens essential supports ranging from intensive case management to in-school mental health services for children to wrap-around housing supports and transitional rent that help unhoused individuals with behavioral health conditions move into stable housing. It also undermines billions of dollars the state has already invested in transforming care and reducing homelessness.

Medi-Cal is the common thread tying together these reforms, making its stability essential to sustaining these supports.

CalAIM’s Homelessness-Ending Housing Supports and the BHSA Rely on Medi-Cal

CalAIM (California Advancing and Innovating Medi-Cal) is targeted to enhance care coordination, improve health outcomes, and address social determinants of health for Medi-Cal enrollees — particularly for those facing complex challenges such as homelessness, chronic medical conditions, and justice system involvement. Two key components of CalAIM are particularly important for serving unhoused or at risk Californians: Enhanced Care Management and Community Supports. Together they ensure robust case management is paired with non-clinical services like housing navigation, security deposits, and transitional rent, interventions proven to help people move into and stay in stable homes.

Between January and March 2025 alone, these supports served 68,000 adults and nearly 13,000 children experiencing homelessness, with providers serving youth nearly doubling. Altogether, nearly 430,000 Californians have accessed CalAIM Community Supports, with 1.1 million services delivered since 2022.

CalAIM Community Housing Supports are also integral to the Behavioral Health Services Act (BHSA), which requires counties to dedicate 30% of their BHSA dollars to housing interventions. Counties must first leverage Medi-Cal housing-related supports before using BHSA funds, making Medi-Cal fundamental to this system. However, if people lose or experience lapses in coverage, or if federal approvals that allow these services to be reimbursed are weakened, the state risks losing the foundation that makes these interventions possible.

BH-CONNECT Strengthens Behavioral Health Care Through Medi-Cal

BH-CONNECT (Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment) builds on the reforms spearheaded by CalAIM to strengthen California’s behavioral health system for Medi-Cal members living with significant behavioral health needs. Approved by the federal government in 2024, it expands community- and evidence-based services for children, youth, and adults with behavioral health conditions, especially for at-risk Californians like those experiencing homelessness, children in the child welfare system, and people leaving institutional care. It also invests in workforce development and incentivizes counties to improve access, outcomes, and system performance.

CYBHI Improves Medi-Cal Behavioral Health Supports for Youth Amid BHSA Shifts

CYBHI (Children and Youth Behavioral Health Initiative) expands prevention and early intervention supports for children through schools and community settings, many of which are delivered or reimbursed through Medi-Cal. CYBHI’s focus on youth is especially critical now as recent changes to the BHSA are forcing counties to restructure existing funding allocations. This shift will require cuts to certain behavioral health services — particularly in prevention and early intervention, innovative programs, and other core services that primarily support children and youth. Moreover, when parents or guardians lose coverage, their children are often left vulnerable to losing their access to care too. This not only disrupts care for children but also creates additional administrative challenges for schools and providers.

Federal Policy

The federal government plays a major role in shaping California’s budget, economy, and the well-being of its people.

Learn how federal policies shape California’s budget, economy, and vital programs — and how state leaders can respond to protect and support Californians.

Explore Federal Resources

State Leaders Can Act to Protect Californians’ Right to Comprehensive Behavioral Health Care

Massive cuts in the Republican mega bill, H.R. 1, threaten Medi-Cal financing and the behavioral health care that it provides, and California risks losing the progress it has made to connect care, housing, and recovery for Californians of all ages statewide. Addressing the federal cuts will require state leaders to do everything possible to protect communities and minimize harm.

The California Health and Humans Services Agency has announced plans to pursue administrative solutions to minimize disenrollment, such as using existing databases to automatically qualify individuals for exemptions and expand public education on the new requirements. Still, even with these efforts, many Californians will inevitably lose coverage unless the state provides additional funding to protect those most at risk.

Policymakers have a path forward to ensuring California remains a national leader in providing comprehensive behavioral health care. By raising significant, ongoing revenue, state leaders can fund the investments needed to protect care and support the well-being of Californians, especially those who rely on critical behavioral health services.

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key takeaway

California has made major strides in expanding health care access, but new federal and state policy threats risk reversing progress. To protect California health coverage disparities and Medi-Cal policy progress, state leaders must act to preserve affordable care and advance health equity.

Affordable health care is essential for every Californian to be healthy and thrive. Medi-Cal, California’s Medicaid program, provides free or low-cost coverage to more than one in three Californians, including children, pregnant individuals, seniors, and people with disabilities. For those who earn too much to qualify for Medi-Cal, Covered California — the state’s marketplace established through the Affordable Care Act (ACA) — helps individuals and families find affordable health coverage. And Medicare, the federal program for adults age 65 and older and some people with disabilities, provides critical coverage for many Californians as they age. Over 23 million Californians benefit from these programs and together, they form the backbone of California’s public health care system.

Over the past decade, California has made major progress towards lowering the uninsured rate, expanding health care access, and ensuring people can get affordable care. Yet persistent health disparities, especially among people of color and adults who remain uninsured, show there is more work to do. Now, this progress is at risk. The harmful Republican megabill, H.R. 1, enacts the largest health care cuts in US history, with more than $1 trillion cut from Medicaid, Medicare, and the ACA marketplace exchanges over the next decade, threatening to reduce health care access for millions of people across the state. State-level budget cuts will further reduce access to health care.

State policymakers should take meaningful action to protect progress that has been made towards universal health care coverage and minimize the harm to people’s access to health care from the federal and state cuts.

Portrait of child girl eating on snack time at school

H.R. 1 and the Federal Budget

H.R. 1, the harmful Republican mega bill passed in July 2025, will deeply harm Californians by cutting funding for essential programs like health care, food assistance, and education.

See how California leaders can respond and protect vital supports.

Learn More

1. Nearly One-Third of Californians Under Age 65 Are Covered by Medi-Cal, But Federal Cuts Put Their Coverage at Risk

Medi-Cal provides free or low-cost health care to nearly one in three Californians under age 65 and it is one of California’s most effective tools for expanding health care access and advancing health equity. About half of all Medi-Cal enrollees are Latinx Californians, who are more likely to work in low-wage jobs without access to employer-sponsored insurance.

Medi-Cal ensures that millions of Californians can see a doctor, fill a prescription, or get behavioral health care when they need it. But new federal policy changes, enacted in Republican megabill H.R. 1, will make it harder for people to keep their health care coverage. The law sharply reduces federal funding for Medicaid — costing California an estimated $30 billion each year — and adds new eligibility and access restrictions that could cause many Californians to lose coverage.

For those not eligible for Medi-Cal, Covered California remains a vital source of affordable coverage. In 2025, nearly 2 million Californians purchased insurance through the marketplace, a record high. Yet these gains are also at risk. H.R.1 cuts support for the marketplace and fails to extend enhanced premium tax credits that have made coverage more affordable. Without federal action, health insurance premiums are projected to nearly double in 2026 for most enrollees.

2. Medi-Cal Works to Reduce Poverty — Continued Investments is the Way Forward, Not Cuts

California’s poverty rate continues to be among the highest in the nation, but Medi-Cal is an important and effective anti-poverty program. In a new way to measure poverty, the Health Inclusive Poverty Measure from the Census counts health care as a basic need and incorporates the benefits people receive from health insurance into their total resources captured under the Supplemental Poverty Measure, which includes earned cash and non-cash benefits from public support programs. Using this new measure, Medicaid and Medicare1Medicare is a federal program that provides health insurance to people age 65 and older and to younger individuals with long-term disabilities. About 6.6 million Californians are enrolled in Medicare, including 1.6 million people who are dually eligible for both Medicare and Medi-Cal due to their age and income. were shown to be the second and third most impactful anti-poverty programs in the country, removing 21.8 million and 15.0 million people from poverty, respectively. In California specifically, the poverty rate using a 3-year average for 2022-2024 under the Supplemental Poverty Measure of 17.7% is significantly lower than the Health-Inclusive Poverty Measure at 18.8%, showing that Medi-Cal and Medicare help keep people out of poverty by providing critical health care.

The harmful Republican megabill, H.R. 1, puts California’s progress in reducing poverty and expanding health coverage at risk. The law could take away Medi-Cal from up to 3.4 million Californians, taking away essential coverage that keeps individuals and families healthy and financially stable. These cuts would further widen long-standing racial and economic inequities across the state. For example, about half of all Medi-Cal enrollees are Latinx Californians, who are more likely to work in low-wage jobs without access to employer-sponsored insurance. Without coverage, more people would face unaffordable medical bills, delay treatment, and fall deeper into economic hardship.

3. California’s Uninsured Rate Reached a New Historic Low in 2024, New Federal Law Threatens Progress

California has made substantial progress in expanding access to health coverage over the past decade. Key drivers of this success include the federal Affordable Care Act and more recent state initiatives, such as expanding full-scope Medi-Cal to all income-eligible Californians regardless of immigration status. As a result, the uninsured rate dropped to 5.9% in 2024, marking a new historic low. These gains reflect a major shift from a decade ago when over 17% of Californians lacked health coverage, underscoring the state’s commitment to improving health care access for all.

Although this progress is significant, recent state and federal budget cuts threaten to reverse gains made towards health care for all. Federal cuts from the harmful Republican megabill, administrative burdens from work requirements, and additional eligibility checks threaten to push millions of Californians off of their health care. State policymakers also made choices to limit the ability of immigrant Californians to access health care. State policymakers chose to freeze Medi-Cal enrollment for undocumented immigrants, impose a burdensome monthly premium for certain immigrant adults, and eliminate dental benefits for certain immigrants, all of which will reverse the historic progress California has made in lowering the uninsured rate.

4. Health Inequities Are Largest for American Indian and Alaska Native Californians

Despite the historic progress made in lowering the overall uninsured rate, significant racial disparities persist in California. American Indian and Alaska Native Californians faced the highest uninsured rate among all racial and ethnic groups in the state in 2024 at 10.2%, and they also faced the highest uninsured rate in 2023. These racial disparities in health coverage highlight the profound and enduring impact of racist policies and practices, which block Californians of color from equal access to health care. Addressing the racial disparities in health coverage requires targeted outreach and education efforts along with other antiracist policy actions to improve health and well-being for Californians of color.

Unfortunately, federal budget cuts from H.R. 1 — the harmful Republican megabill — and state budget cuts specifically target immigrants by restricting Medi-Cal and Children’s Health Insurance (CHIP) eligibility to a narrow group of immigrants and imposing costly and burdensome requirements on certain immigrants in California, respectively. These cuts, along with broader cuts to Medi-Cal, will worsen existing health disparities for racial and ethnic minorities.

5. Adults Are Most Likely to Be Uninsured, and Federal Cuts Could Push Even More Out of Coverage

While the overall uninsured rate in California hit a historic low in 2024 of 5.9%, adults ages 19-64 faced a much higher uninsured rate at 8.4%. Many adults work in low-wage jobs that do not offer employer-sponsored health coverage and even when coverage is available, the cost of insurance is often too high, according to research from the Kaiser Family Foundation. In addition, some adults also do not qualify for Medi-Cal or financial help through Covered California. As a result, many working-age adults are left without affordable health coverage. Meanwhile, the uninsured rate for older adults over 65 is much lower than the overall rate. This is largely due to the accessibility of Medicare, which provides health coverage for older adults and people with disabilities.

However, the harmful Republican megabill H.R. 1 undermines Medicare by restricting access for certain groups of immigrants and making health care and prescription drugs through the program less affordable. Additionally, H.R. 1 contains multiple provisions that will result in adults losing their health care. Administrative burdens like work requirements and increased eligibility checks for adults as well as new copayments on certain Medi-Cal services for low-income adults will likely result in millions of Californian adults — who are already the age group most likely to lack health insurance — losing coverage.

Looking Ahead, Policymakers Can Take Action to Protect Health Coverage

California has made tremendous progress toward securing health care access for all Californians. Achieving a historically low uninsured rate in 2024 is a testament to the sustained efforts of advocates and policymakers who have worked to make health for all a reality. However, disparities across racial and ethnic groups and age groups continue to persist, and that progress is gravely under threat. The cuts to health care in H.R.1, as well as the continued uncertainty of the enhanced premium tax credits, threaten to reverse over a decade of progress.

Given the magnitude of federal and state budget cuts to health care, California leaders should take meaningful steps to minimize the harm to people’s access to health care, especially in how they contend with implementing harmful federal policies like work requirements and more frequent eligibility checks. Key policy recommendations include:

  • Avoid rushing the implementation of H.R. 1 and engage stakeholders early for an inclusive decision-making process. The state should take time to fully understand potential challenges and coordinate with counties, advocates, health care providers, and community organizations before implementing new federal requirements. Early engagement and inclusive decision-making processes can improve outcomes and prevent unintended loss of coverage.
  • Communicate proactively, regularly, and effectively with Medi-Cal enrollees. The state should ensure that Medi-Cal enrollees receive accurate and accessible information in their preferred language about policy changes, including what steps they need to take to enroll in or maintain Medi-Cal coverage. The state should also partner with and invest in community health workers and community-based organizations that are trusted messengers in their communities to help reach more Medi-Cal members in culturally and linguistically appropriate ways.
  • Strengthen Medi-Cal eligibility and enrollment systems. The state should invest in eligibility and enrollment infrastructure to make it easier for people to enroll in and keep their Medi-Cal coverage. This includes adding new data sources to increase auto-verifications and auto-renewing as many members as possible. Strengthening these systems will reduce coverage losses due to paperwork barriers and administrative errors, and will free up county resources to serve Medi-Cal members who must go through a manual process.
  • Protect immigrants in state-funded Medi-Cal from new federal requirements. The state should ensure that Californians enrolled in state-funded Medi-Cal — including undocumented adults — are not subject to new federal work reporting or cost-sharing requirements. These Californians already face structural barriers and harmful state-level policies, including the enrollment freeze and monthly Medi-Cal premiums. Exempting them from additional access restrictions is essential to prevent further inequities in access to care.
  • Set new cost-sharing requirements at the lowest possible level. Under H.R. 1, states must impose new mandatory cost-sharing for adults covered through the ACA’s Medicaid expansion who have incomes above 100% of the federal poverty level. States can charge between $1 and $35 per medical service, but only for certain services. The state should set these charges at the lowest level allowed by federal law to limit financial barriers that discourage people from seeking care and to protect access for low-income Californians.
  • Use automation to protect coverage under work requirements. H.R. 1 requires states to implement work reporting requirements for certain adults in the ACA expansion population. The state should maximize the use of existing data systems to automatically identify and exempt individuals who clearly qualify, reducing the burden on both beneficiaries and counties. Automating this process will help prevent eligible Californians from losing coverage simply because they miss paperwork deadlines or cannot navigate new reporting requirements.

The State Department of Health Care Services estimates a funding loss close to $30 billion every year as a result of H.R. 1. This represents an existential threat to all of the progress California has made in expanding health coverage over the past decade. Such a shortfall will have ripple effects throughout the health care system — from reduced access to care for low-income families, to financial strain on hospitals, to higher premiums and cost-sharing for people who purchase coverage through Covered California.

Mitigating the harm of federal cuts is not enough. State leaders and agencies should work to preserve and, where possible, restore health coverage in the face of unprecedented loss of federal funding.

Addressing this budget challenge and ensuring Californians have access to affordable health care will require bold leadership and new, ongoing state revenue, particularly from corporations and wealthy individuals who will benefit the most from newly expanded federal tax breaks. Without revenue-raising efforts, the state will be forced to make even deeper, more painful cuts to Medi-Cal, such as by reducing benefits, limiting provider payments, or restricting eligibility. These should all be a last resort rather than a first response.

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  • 1
    Medicare is a federal program that provides health insurance to people age 65 and older and to younger individuals with long-term disabilities. About 6.6 million Californians are enrolled in Medicare, including 1.6 million people who are dually eligible for both Medicare and Medi-Cal due to their age and income.

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Over 5.5 million Californians depend on CalFresh — California’s name for the Supplemental Nutrition Assistance Program (SNAP) — to put food on the table every month. CalFresh provides modest monthly food assistance and, as one of the few means-tested programs that reaches almost all low-income people, is the state’s most important anti-hunger tool.

In 2023, CalFresh was the most effective safety net program in boosting family resources, according to recent data. Over 850,000 more Californians would have been in poverty without CalFresh providing food assistance, which corresponds to a 2.3 percentage point increase in the poverty rate. Children across the state experienced an even larger reduction in poverty of nearly 4 percentage points as a result of CalFresh.

The latest data continue to show that poverty — and hunger — are policy choices. Recent federal inaction by the US Department of Agriculture to fund November 2025 SNAP benefits defies long-standing practice and threatens to increase hunger for millions of families. Policymakers have the tools to ensure that no one goes hungry in the world’s fourth largest economy. Even brief periods of hunger can have devastating effects on people, particularly children, which is why policymakers should boost investments to strengthen CalFresh and help all Californians meet their most basic needs.

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The California Work Opportunity and Responsibility to Kids (CalWORKs) is the state’s version of the federal Temporary Assistance for Needy Families (TANF) program, established in 1997 following the federal program’s creation in 1996. CalWORKs is a monthly cash grant program designed to support children and families with low incomes. CalWORKs aims to address poverty for California families by aiding families financially and assisting parents in overcoming employment barriers.

Who is eligible for CalWORKs?

Eligible Californians must have at least one child in the home and meet income thresholds that vary depending on household size. For example, a family with two parents and two children in a high-cost county is eligible if they make less than $2,170 per month. Benefits include monthly cash grants, employment assistance, and critical supportive services. CalWORKs helps over 650,000 children and their families, predominantly single-parent households headed by women of color.

The program is administered by the California Department of Social Services and funded through state and federal dollars.

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The Supplemental Security Income/State Supplementary Payment programs, or SSI/SSP for short, provide income support for eligible individuals in the form of cash assistance. Established in 1974, the programs help older adults with low incomes and people with disabilities pay for housing and other necessities.

Who is eligible for SSI/SSP?

Eligible Californians are low-income adults who are 65 or older, blind, or disabled. Some blind or disabled children are also eligible for SSI benefits. Benefits include monthly payments that help well over 1 million Californians.

SSI is a federally funded program, while the SSP program is California’s own program that supplements the SSI grant. Both are administered by the Social Security Administration.

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Medi-Cal is California’s Medicaid program that provides free or low-cost health care to millions of Californians with low incomes. It is designed to provide access to essential health services that support public health and economic stability. Medicaid was established in 1965 as a state-federal partnership to offer coverage to people with low incomes, including children, pregnant women, seniors needing long-term care, and individuals with disabilities. 

Over time, Medi-Cal has evolved to cover more people and more types of care over the years. A major milestone was the state’s full implementation of the Affordable Care Act in 2014, which expanded eligibility to include low-income adults without dependent children.

Who is eligible for Medi-Cal?

Eligible Californians mainly qualify based on their income, as measured by Modified Adjusted Gross Income (MAGI). That includes adults with incomes up to 138% of the federal poverty level (FPL) and pregnant people with incomes up to 213% of the FPL. Children in families with incomes up to 266% FPL are also eligible through the Children’s Health Insurance Program (CHIP). 

People are also eligible if they are: blind, disabled, age 65 and older, receiving Supplemental Security Income, in long-term care facilities, or are former foster youth until the age of 26.

What services does Medi-Cal cover?

Benefits include a wide range of services, including doctor’s appointments, emergency services, physical and occupational therapy, dentist appointments, laboratory services, prescription drugs, vision care, preventive and wellness services, and behavioral health services. Medi-Cal also offers transportation to and from appointments for services that are covered by Medi-Cal.

The program is overseen and administered by California’s Department of Health Care Services at the state level and is funded by the federal and state governments.

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CalFresh is California’s state version of the federal Supplemental Nutrition Assistance Program (SNAP), which provides modest monthly assistance to Californians with low incomes to purchase food. Established in its modern form in 1977, CalFresh aims to fight hunger and keep Californians out of poverty, and it has expanded to provide food assistance to over 5 million people.

Who is eligible for CalFresh?

Eligible Californians must meet certain income and asset criteria to qualify for food assistance. CalFresh generally provides benefits to households with incomes up to 200% of the federal poverty level.

Benefits are disbursed monthly on an Electronic Benefit Transfer (EBT) card that can be used at grocery stores or farmers’ markets that accept EBT cards. The benefits a household receives depend on household size, income, and monthly expenses, such as child care.

The California Food Assistance Program (CFAP) was established in 1997 to provide state-funded benefits to noncitizens who do not qualify for federally funded CalFresh benefits. CalFresh is available to certain groups of immigrants, but it is not currently available to undocumented immigrants.

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Medi-Cal, California’s Medicaid program, is a lifeline for more than one-third of Californians, providing essential health care coverage to children, pregnant individuals, seniors, and people with disabilities.

The recently enacted harmful Republican mega bill, H.R. 1, enacts the largest health care cuts in US history, with about $1 trillion cut from Medicaid. For California, the harm will be severe. Up to 3.4 million people could lose Medi-Cal coverage and the state could lose $30 billion in federal funding each year.

The law undermines Medi-Cal in two main ways. It imposes financing restrictions that strip billions in federal support, and it creates eligibility and access barriers that make it harder for people to stay covered. The table below highlights the key provisions of H.R. 1 and how they could reshape coverage in the years ahead.

Federal Policy

The federal government plays a major role in shaping California’s budget, economy, and the well-being of its people.

Learn how federal policies shape California’s budget, economy, and vital programs — and how state leaders can respond to protect and support Californians.

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Federal Policy
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