California must financially prepare for federal Medi-Cal cuts now | Opinion

Beginning January 2027, provisions set by House Resolution 1, along with new Medi-Cal community engagement requirements, are expected to result in the loss of health coverage for millions. The scale of impact is staggering: Nearly 1.5 million Californians could lose Medi-Cal coverage at full implementation, with a surge in uninsured anticipated to begin in the second half of the 2026-27 fiscal year.

Many of those who lose coverage will once again become eligible for county indigent care programs. Indigent care is a vital but often overlooked component of California’s healthcare safety net: Counties are legally required to provide basic medical care to low-income, uninsured lawful residents who fall outside private insurance and public programs such as Medi-Cal.

Intended as care of last resort, indigent care ensures that people with no other options can still receive medical care.

For decades, counties carried out this mandate with the support of dedicated state funding, but that support has dissipated. Following passage of the Affordable Care Act, access to health coverage expanded dramatically, and many individuals previously served by indigent care programs became eligible for Medi-Cal or Covered California.

As uninsured rates fell, county indigent caseloads declined and the state reduced and redirected significant portions of indigent care funding.

Counties correspondingly scaled back their indigent care programs; some were downsized significantly, while others became largely dormant. Over time, clinical capacity, staffing and the administrative and IT infrastructure needed to deliver care were reduced to minimal levels. Today, these systems lack the resources, workforce, administrative support and operational readiness to respond to a sudden influx of patients, leaving counties ill-equipped to scale services back up.

California’s indigent care system is not ready

Counties remain legally responsible for providing indigent care, yet the state funding that once supported that responsibility has largely been redirected. And the infrastructure that once made this system viable has been severely diminished. Counties are being asked to meet a mandate without the means to fulfill it.

Early estimates suggest that if roughly one-third of those losing coverage, about 33%, ultimately turn to county indigent care, this will create a funding gap of $761 million in fiscal year 2026-27, with ongoing costs totaling $2.4 billion starting in 2027-28.

County budgets are already strained and cannot absorb this cost shock. In Yolo County, where I serve as a county supervisor, we are already facing a budget deficit and implementing painful service cuts. Across the state, counties face similar pressures.

If counties are forced to absorb these costs alone, the consequences will be felt far beyond healthcare. Every local service will be affected: public safety, fire departments, homeless services, child welfare programs and more.

State and county partnership on a solution is paramount

California must provide dedicated financial support in the upcoming 2026-27 budget cycle to serve this population through a county indigent program or state coverage option. For counties to be ready, we need these resources now — before January — to rebuild care delivery systems, hire staff and reestablish the administrative capacity required to meet the coming surge.

Without immediate, dedicated funding, counties will remain legally responsible for delivering care they are not adequately resourced to provide. This growing gap between mandate and means will inevitably result in deeper service cuts and worse outcomes for local communities. The impact on healthcare will not just affect the uninsured population but all users and payers of healthcare as emergency rooms are utilized for primary care and people delay care.

The promise of a healthcare safety net cannot remain an unfunded county mandate of impossible proportions. If California truly wants to remain a leader in inclusive healthcare coverage, it must commit to keeping people in state coverage or rebuilding county indigent care programs.

Sheila Allen is a Yolo County supervisor and board member of the Rural County Representatives of California.