A growing dispute in Sacramento could determine whether hundreds of thousands of Californians keep their health coverage under new federal rules.

A dispute in Sacramento is emerging over how California will implement H.R. 1, the One Big Beautiful Bill Act, and whether counties will have the staff needed to manage new federal eligibility requirements for programs such as Medi-Cal and CalFresh.State officials and county administrators agree the law will significantly increase administrative workload for the eligibility systems that determine who qualifies for benefits. But they disagree sharply on how many workers will be needed.

County agencies estimate the new rules could require more than 2,000 additional Medi-Cal eligibility workers and roughly 400 additional CalFresh workers statewide. The Governor’s current proposal does not include funding for those positions.

The debate carries high stakes. Analysts estimate that millions of Californians could lose health coverage under the policy changes in H.R. 1, in part because of new eligibility rules and work requirements. County administrators warn that without sufficient staffing, some eligible residents could also lose benefits simply because they cannot navigate increasingly complex application and renewal processes.

After years reporting on Medi-Cal and CalFresh outreach efforts, I had come to appreciate how much the system depends on the people who help residents apply for benefits, resolve eligibility questions, and remain enrolled. Those eligibility workers rarely appear in policy debates, yet they operate one of the largest pipelines of federal funding into California’s economy.

To understand how the eligibility system works—and why counties believe additional staffing may be necessary—I spoke with Carlos Marquez of the County Welfare Directors Association of California, which represents the local agencies that administer Medi-Cal, CalFresh, and other safety-net programs.

In the conversation below, Marquez explains how counties are preparing for the new federal requirements and what could happen if administrative capacity does not keep pace with the workload.

Before we get into H.R. 1, can you help explain the scale of the federal and state benefits that flow through the county eligibility system?

The scale is significant, both for individual families and for local economies.

Take CalFresh. It’s not just about the direct benefit households receive. There’s also a strong economic multiplier effect. For every dollar in CalFresh benefits, about $1.80 in economic activity is generated. That means these benefits circulate in local communities.

On the Medi-Cal side, before H.R. 1 we had a very favorable cost-sharing structure between the state and federal government.

For the ACA expansion adult population, the federal government reimburses 90 percent of medical costs. Administrative costs for Medi-Cal eligibility are reimbursed at 75 percent.

Those are among the more favorable cost-sharing arrangements available to the state. At a time when cost shifts are going in the opposite direction for some programs, it’s important that California maximize those structures.

That’s part of the premise behind our budget proposals. We believe the county eligibility workforce offers a cost-effective and upstream approach to mitigating the worst impacts of H.R. 1.

If we can mitigate severe program drop-off, we can help avoid the downstream costs associated with uncompensated care and increased hunger.

Many people are already concerned about wait times and delays in the system. Where does the eligibility system stand today in terms of capacity?

Over the past decade the state and counties have made meaningful progress.

For CalFresh, participation rates have improved significantly. We used to be in the 60 percent range and now we’re in the 80 percent range. That’s still not where we want to be, but it reflects steady improvement.

One remaining gap involves college students who are eligible but not enrolled. If we can address that, participation rates could improve further.

Timeliness has also improved, particularly after administrative funding was rebased in 2017. Prior to that, CalFresh administration was chronically underfunded. The rebasing aligned funding more closely with the cost of doing business.

After that change we saw improvements in both timeliness and participation.

On the Medi-Cal side, response times have improved as well. The expansion of call centers has been a major factor. Allowing counties flexibility in how they structure their operations has helped significantly.

When the county eligibility workforce is adequately funded and fully staffed, they are able to translate policy changes and funding into real impacts for the communities they serve.

How would you describe the challenges H.R. 1 presents for county eligibility systems?

H.R. 1 represents a significant shift.

For at least the past decade, county eligibility workers have embraced a culture of coverage and program access. Their role has been to remove unnecessary barriers and help eligible individuals gain access to programs.

The new federal requirements introduce a different paradigm.

Evidence from other states shows that work requirements tend to lead to people losing benefits.

The question facing California is whether we can implement these requirements in a way that minimizes harm and prevents large-scale program drop-off.

This work is highly human-driven. Eligibility workers need to screen clients for exemptions, understand their circumstances, identify whether someone qualifies for relief, and help them maintain compliance when work requirements apply.

You have to build trust and rapport with the client. You have to ask the right questions and understand what is happening in their lives.

You cannot automate your way out of this problem. This depends on human workers interacting with people who need help navigating the system.

Counties estimate that implementing H.R. 1 may require roughly 2,000 additional Medi-Cal eligibility workers and about 400 CalFresh workers. How did counties arrive at those projections?

The projections come from surveys of counties across the state.

For counties that previously had experience implementing work requirements, we asked how much additional time would be needed to administer the new requirements responsibly.

For counties without that experience, we asked what staffing would be required to implement the system from the ground up.

Based on those responses, counties estimate that more than 2,000 additional eligibility workers would be needed within Medi-Cal and more than 400 within CalFresh.

Some counties operate overlapping workforces that handle eligibility for both programs, particularly through call centers.

On the Medi-Cal side, the projections account for screening individuals for work-requirement exemptions as well as the additional six-month redeterminations required under H.R. 1.

The survey responses suggested that these new requirements would add roughly an additional hour of work per client per year.

If those additional positions are not added, what does that look like operationally?

If counties are required to spend significantly more time with each household member affected by the new administrative requirements without additional staff — and in some cases with fewer staff due to H.R. 1 administrative cost shifts — there will be operational trade-offs.

Those impacts could include longer application and recertification processing times for CalFresh and Medi-Cal.

Call center wait times could increase, and there could be delays in returned calls and longer waits for individuals who walk into county offices.

Higher caseloads per worker would limit the time available for complex cases or for vulnerable populations who may need additional assistance.

There could also be more procedural denials when documentation cannot be submitted on time, as well as reduced capacity to help individuals experiencing homelessness, disability, or language barriers.

Another likely outcome is increased “churn,” where eligible individuals temporarily lose benefits and must reapply.

Eligibility workers often help residents gather documentation and complete required steps. When workloads rise without staffing increases, workers have less time to provide that support. As a result, delays can increase and eligible individuals may fail to receive benefits simply because the system lacks the capacity to help them complete the process.

Could higher caseloads also affect program accuracy or federal compliance?

Eligibility determinations must meet strict federal accuracy standards.

When caseloads increase and workers have less time to review complex cases, the risk of errors grows.

CalFresh and Medi-Cal both have federally mandated timeliness and accuracy requirements. If backlogs increase, timeliness declines, or error rates rise, the federal government can impose corrective actions, sanctions, or fiscal penalties.

Addressing those problems later could require additional state or county resources.

Operationally, doing nothing would lead to higher caseloads per worker, longer wait times, reduced client support, and greater barriers for residents seeking essential health and nutrition benefits.

Over time, more eligible individuals could fall through the cracks — not because they are ineligible, but because the system lacks the capacity to help them navigate the process.

Counties remain responsible for medically indigent residents. If people lose Medi-Cal coverage due to administrative barriers, does that increase local indigent care costs?

Some people will unavoidably lose Medi-Cal eligibility under the new federal requirements, and counties cannot control those policy changes.

However, the number of people who lose coverage could be higher if counties lack the administrative capacity to process applications, complete renewals, and assist residents navigating increasingly complex rules.

Counties remain legally responsible for providing care to medically indigent residents.

When eligible individuals fall off Medi-Cal due to administrative barriers, they often still need care and turn to county hospitals, clinics, and behavioral health systems.

In those cases the cost of care shifts away from federally and state-funded Medi-Cal coverage and onto county safety-net systems supported largely by local general funds.

From a county supervisor’s perspective, is investing in eligibility staffing a way to protect the local general fund?

Counties administer Medi-Cal on the state’s behalf, and the program’s shared funding model reflects that structure.

While counties fund a portion of eligibility administration, most costs are paid by the state and federal governments.

Maintaining sufficient eligibility staffing helps ensure that residents who qualify remain connected to coverage.

When eligible individuals enroll in or retain Medi-Cal, the cost of their care is largely supported by state and federal funding rather than falling on county safety-net systems.

When eligibility capacity is constrained, the demand for care does not disappear.

Ensuring eligible residents stay enrolled allows them to receive preventive and ongoing care through Medi-Cal providers rather than relying on emergency or crisis-based services within county systems.