Medicaid, the largest public health safety net in the United States, is facing a nearly $1 trillion cut over the next decade.
Changes to the program are the result of H.R. 1, the One Big Beautiful Bill Act, which was signed into law on July 4, 2025. The law claims to seek a reduction in wasteful spending and abuse. According to an estimate from the Congressional Budget Office, the net effect of its changes to Medicaid will lead to 10 million Americans losing their health insurance.
In Santa Cruz County, where roughly 30 percent of residents are enrolled in Medi-Cal, California’s version of Medicaid, the consequences of the cuts will increase pressure on an already strained healthcare system.
“You might have people without insurance in the emergency room seeking care for things that they should be coming to our clinic for, ” said Dr. Devon Francis, the chief medical officer at Salud Para La Gente in Watsonville. “Meanwhile, someone who has a real emergency is having to wait longer.”
Francis said the cuts directly imperil community clinics like Salud, which receive most of their funding through Medicaid subsidies and are mandated to provide care regardless of their patients’ ability to pay. And, the changes are likely to raise healthcare costs for everyone, even those who are not on Medicaid.
Meanwhile, California is imposing additional restrictions of its own, particularly centered on Medi-Cal eligibility for undocumented immigrants. The combination of state and federal changes are likely to amplify the confusion about who is eligible for Medi-Cal, potentially leading to fewer enrollments even among those who should qualify. A few of the biggest changes include:
- Starting in January 2027, more people will be required to work or volunteer 80 hours per month to receive benefits. This is a federal requirement.
- Starting in March 2027, many Medi-Cal recipients will need to requalify every six months instead of annually. This is a federal requirement.
- Most undocumented adults, who have increasingly qualified for Medi-Cal over the last decade, can no longer newly enroll as of Jan. 1, 2026 (those who already receive benefits will continue to do so until they fail to meet the requirements). This is a state change.
Find a full list of changes to Medi-Cal here. For more details, see this handout from the California Legislative Analysts Office.
People who are confused or have questions about their eligibility should contact their county’s social services office:
- Monterey County Social Services Department
- Santa Cruz County Human Services Department
- San Benito County Health and Human Services Agency
Francis spoke with KAZU about the impact the changes are having on Santa Cruz County’s healthcare system.
This interview has been edited for length and clarity.
Devon Francis (DF): So since the Affordable Care Act was passed more than 15 years ago, about 30% of our patients had no insurance in 2009, compared to just 8% last year. Statewide, California was covering 95% of the population with health insurance as of last year. Those gains will be gone with H.R. 1 and the California cuts. So the combined impact of the H.R. 1 cuts and the California budget restructuring is that people here locally will lose health care coverage. That impacts those individuals. It also impacts people who have private insurance as well, because there is a ripple effect when you have larger groups of people who are uninsured.
Jerimiah Oetting (JO): I read from the California Legislative Analyst Office that they estimate by the end of 2030 there'd be two million fewer insured people in California. And so, like you were saying, this doesn't just affect Medicaid patients. I think a lot of people have these general frustrations with healthcare — long waits or it's hard to get an appointment.
DF: Those could get worse. For example, if you need to go to an emergency room you might have people without insurance in the emergency room seeking care for things that they should be coming to our clinic for. And meanwhile, someone who has a real emergency is having to wait longer. Some of the other projections are that as people lose coverage, whether it's Medi-Cal or through Covered California, those people with private insurance are looking at higher premiums.
JO: Which is one of the more confusing aspects of this, this whole idea was to somehow save money. But does it save money?
DF: I would say no. I think if you look, many other countries have figured out how to spend less money on their health care costs and provide more coverage to more people. It makes a lot of sense to take care of issues when you can prevent them, as opposed to in an emergency room. So we are paying for the care regardless. And I think that doing it this way, it's a lot more expensive and it is likely to be more expensive on an individual basis as well.
JO: Can you kind of explain broadly what is changing?
DF: This is the part that is confusing, because there are many different things that are happening at different times. So for example, H.R. 1 has put in place work requirements for patients on Medicaid. There's also increased eligibility checks. So instead of re-enrolling once a year, it will be every six months. On the California state side, there's going to be changes, that already went into effect this year, of freezing enrollment for some adults who are undocumented.
JO: And they were covered?
DF: If you were covered, you're still covered as long as you continue to enroll. But if you weren't covered, you can't enroll.
JO: Wow.
DF: So it gets confusing. If people have Medi-Cal now, they really want to pay attention to that enrollment date, and…we will see anybody in the community, even if they're not our patient, to help walk them through their specific situation and help them enroll or re-enroll in medical or covered California, because it is very confusing.
JO: Big takeaway, this equals less revenue because you rely on Medicaid for your revenue. What is Salud doing to try and make up that difference?
DF: We've been around for almost 50 years now. We will continue to be providing health care to the community. We're actually hiring more doctors and more health care providers so we can have appointments available when patients need them,
JO: So you're actually adding providers?
DF: We're adding providers. And then we're trying to offset our revenue loss through more grant funding and more fundraising and trying to use those revenue streams to help offset the loss. We are all across the county, across the state, across the country trying to figure out how to make this work for our patients.
JO: If you're somebody who thinks of this as a positive change, this isn't uncommon in this country. What would you say to that perspective?
DF: Why are we in a situation where people who are working hard, many of them working 10 or 12 hours a day, six days a week, why aren't those people earning health insurance through their jobs if that's going to be our system? Or, we could take a bigger step back and say, why aren't we, as a society, just providing a basic human right of health care? It's actually less expensive to do it that way.
JO: What can people do to help?
DF: On a community level, I would encourage us to be informed about the health policy decisions and understanding what's happening at the state and federal level, how that's impacting us here on the Central Coast. We do have an election coming up. It's an opportunity to engage with our elected officials. Vote for policies that are going to support healthy communities. And I mentioned we are increasing our fundraising, so we will gratefully accept any donations. You can go to our website to donate at https://www.splg.org.
JO: All right. Well, Doctor Devin Francis, thank you for joining us on Mending the Net.
DF: Thank you so much.
Support for this project from Community Foundation Santa Cruz County. Bringing together people, ideas, and resources to inspire philanthropy and accomplish great things.
