Legislation Details

File #: 26-850    Name: H.R.1 and State Policy Changes
Type: General Agenda Item Status: Scheduled PM
File created: 10/1/2026 In control: Board of Supervisors
On agenda: 10/13/2026 Final action:
Title: a. Receive a presentation from the Central California Alliance for Health on emerging coverage gaps and safety-net challenges resulting from H.R.1 and State Policies; b. Receive an overview of anticipated impacts resulting from federal budget reconciliation H.R.1 and parallel state-level Medi-Cal policy changes to the County’s healthcare system from staff at Natividad Medical Center and the Health Department; and c. Provide direction to staff as appropriate.
Attachments: 1. Board Report, 2. The Alliance H.R.1 and State Policy Changes Presentation, 3. Health and Natividad H.R.1 and State Policy Changes Presentation
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Title

a. Receive a presentation from the Central California Alliance for Health on emerging coverage gaps and safety-net challenges resulting from H.R.1 and State Policies;

b. Receive an overview of anticipated impacts resulting from federal budget reconciliation H.R.1 and parallel state-level Medi-Cal policy changes to the County’s healthcare system from staff at Natividad Medical Center and the Health Department; and

c. Provide direction to staff as appropriate.

Report

RECOMMENDATION:

It is recommended that the Board of Supervisors:

a. Receive a presentation from the Central California Alliance for Health on emerging coverage gaps and safety-net challenges resulting from H.R.1 and State Policies;
b. Receive an overview of anticipated impacts resulting from federal budget reconciliation H.R.1 and parallel state-level Medi-Cal policy changes to the County’s healthcare system from staff at Natividad Medical Center and the Health Department; and

c. Provide direction to staff as appropriate.


SUMMARY:

The Central California Alliance for Health (the Alliance) is a local public agency that serves as the regional Medi-Cal health plan. Using the state’s County Organized Health System (COHS) model, the Alliance serves over 415,000 members in Mariposa, Merced, Monterey, San Benito, and Santa Cruz counties. They work in partnership with contracted providers to promote prevention, early detection, and effective treatment, and improve access to quality health care for those we serve. The Health Department and Natividad operate the County’s healthcare system, delivering an array of outpatient, specialty, inpatient, emergency, laboratory, imaging, trauma, and other services to the County’s residents with a focus on ensuring access to the County’s Medi-Cal, underinsured, and uninsured residents. There will be significant changes to the Medi-Cal program resulting in significant reductions in enrollment and reimbursements to healthcare organizations. 


DISCUSSION:

H.R.1 introduces substantial federal policy shifts affecting Medi-Cal and related safety-net programs. These changes create stricter eligibility requirements, reduce federal support for county-administered programs, and shift major financial and administrative responsibilities to counties. Additionally, State budget policy changes will further impact Medi-Cal beneficiaries, particularly those members with Unsatisfactory Immigration Status (UIS). 

 

Staff from the Alliance will provide an overview of federal and state policy changes that will create structural changes to the Medi-Cal program regarding membership and reimbursement.  Additionally, the Alliance will provide an overview of the impacts specific to Monterey County, with a focus on the growing uninsured population, those members with UIS, and additional challenges to be faced by safety net providers. 

 

The Health Department operates 12 Federally Qualified Health Centers in the cities of Salinas, Marina, and Seaside and one mobile clinic focused on delivering services at school sites in the cities of Soledad, Salinas, and Castroville.  Over 40,000 patients access primary care, pediatric, women’s health, dental, chiropractic, and specialty care services at the Department’s clinic sites.  Staff from the Health Department will provide an overview of the County’s Federally Qualified Health Centers and anticipated impacts to its patients and payor mix resulting from policy changes.

 

Natividad is the only Level II Trauma Center in Monterey County and is Monterey County’s only teaching hospital. Natividad’s three-year UCSF affiliated family medicine residency program graduates 10 new physicians each year. Natividad has the only locked inpatient Mental Health Unit in the county. The Acute Rehabilitation Center is ranked in the top 10% of acute rehabilitation facilities in the country and has been for 7 consecutive years. Natividad has highly qualified interpreters on staff which includes indigenous languages. In 2025, Natividad was awarded the Gage Award Top Quality Improvement Honor by America’s Essential Hospitals, a network of more than 350 public hospitals. Natividad had over 11,200 inpatient admissions, over 59,000 emergency visits, over 4,900 outpatient surgeries and approximately 87,500 outpatient visits last fiscal year. The D’Arrigo Family Specialty Services offers a wide range of specialty care, including comprehensive women’s health program, Cardiology, Neurology, Orthopedics, Podiatry, Pulmonary Medicine, and Lactation services. Over 50% of our patients are covered by Medi-Cal.  Natividad as a Disproportionate Share Hospital, anticipates drastic funding cuts due to State Directed Payment Reductions, Federal Medical Assistance Percentage payment reductions, and UIS population transitioning from Medi-Cal managed care to state fee-for-service reimbursement.  In addition, Natividad anticipates an increase in self-pay patients as patients lose Medi-Cal coverage due to work/community service requirements, semi-annual eligibility redeterminations, cost sharing including premium contributions and disenrollments from Covered California.

 

This work supports one of the County of Monterey Health Department 2025-2028 Strategic Plan Goal(s): 2. Provide Exceptional Person-Centered Care through Accessible, Community-Focused Health Services. It also supports one of the ten essential public health services, specifically: 7. Link people to needed personal health services and ensure the provision of health care when otherwise unavailable.


OTHER AGENCY INVOLVEMENT/COMMITTEE ACTIONS:

Central California Alliance for Health, Natividad, and the County of Monterey Health Department collaborated on this report and presentation. The office of the County Counsel reviewed as to legal form.  

 

FINANCING:

There is no fiscal impact to the General Fund resulting from this presentation. Based on preliminary estimates, the Health Department estimates a revenue reduction of approximately $13.9M in Fiscal Year 2027-28 due to the structural changes to the Medi-Cal program. Natividad estimates a revenue reduction of approximately $11.7M in fiscal year 2027-2028.


BOARD OF SUPERVISORS STRATEGIC PLAN GOALS: 

Well-Being and Quality of Life - The agreement supports access to quality health care for Monterey County Medi-Cal members by promoting prevention, early detection, effective treatment, and collaboration with contracted health care providers. This aligns with the goal of improving community health and access to health services.

Mark a check next to the related Board of Supervisors Strategic Plan Goals:

  X    Well-Being and Quality of Life

____ Sustainable Infrastructure for the Present and Future

____ Safe and Resilient Communities

____ Diverse and Thriving Economy

         Dynamic Organization and Employer of Choice

 

Prepared by: Juanita Sanders, Management Analyst II, 755-5494

Approved by: Elsa Mendoza Jimenez, Director of Health Services, 755-4526

                               Nancy Buscher, Interim CEO Natividad, 783-2551

 

Attachments:

Board Report

The Alliance H.R.1 and State Policy Changes Presentation

Health and Natividad H.R.1 and State Policy Changes Presentation