Work requirements and other changing eligibility rules will force an estimated 17,000 low-income Santa Barbara County residents off Medi-Cal in 2027—followed by an additional 13,000 people in 2028.
The fresh assessment from Medi-Cal and county Social Services Department administrators describes an escalating loss of coverage that has public health officials scrambling for ways to blunt the impact.
And it comes as officials separately expect an additional 20,000 county residents to cancel their Covered California insurance plans.
That retreat from former President Obama’s signature health care legislation over the next two years—in the wake of new federal policies that eliminated helpful subsidies that lowered bills—would reportedly help wipe out 10 years of countywide Affordable Care Act enrollment gains.
The one-two punch means 50,000 people, or an additional 11% of the county’s approximately 442,000 residents, are expected to join the ranks of the medically uninsured by 2029.
“It’s really devastating,” said Marina Owen, CEO of CenCal Health, the publicly funded Medi-Cal managed care plan serving Santa Barbara and San Luis Obispo counties. “Small problems become big problems, and more costly problems, when people don’t have health insurance. They just delay care.
“We’re working to change this terrible story,” Owen said.
An ad-hoc roundtable of Santa Barbara hospital, clinic, nonprofit and public agency leaders is developing a range of responses for 2027 aimed at diluting the effects of the One Big Beautiful Bill Act, or HR 1.
The federal legislation signed into law by President Trump on July 4, 2025 dramatically reshaped safety net programs and slashed health care funding across the United States.
Shifted responsibility
A massive federal budget package, the Big Beautiful Bill extended tax cuts, eliminated taxes on tips and overtime, funded border security and cut spending on safety-net programs like Medicaid, called Medi-Cal in California, as well as SNAP food assistance.
In California, the bill shifted an estimated $9.5 billion in costs to the state’s 58 counties, according to the California State Association of Counties.
In Santa Barbara County, authorities say effects started to hit home in January, when financial assistance provided to Covered California enrollees began to disappear. Among other changes, HR 1 let COVID-19 pandemic-era enhanced subsidies expire.
“We saw people immediately drop” their coverage, Owen said.
In June, officials at the county CEO’s office blamed dozens of layoffs on budget shortfalls resulting from the loss of state and federal health care funding.
In one key provision, the federal bill requires that non-disabled, non-pregnant adults on Medi-Cal ages 19 to 64 earn at least $580 a month. They could also complete 80 hours of qualifying activities like work, school, or volunteering.
Trump Administration officials say the work requirement will save taxpayers money and promote personal responsibility.
“This rule helps Americans build skills and independence through work, education, job training, or community service, creating new opportunities for themselves and their families,” Dr. Mehmet Oz, administrator of the federal Centers for Medicare & Medicaid Services, said in a June statement.
Critics say the work requirement and other new policies—including rate cuts to health care providers, clinics and hospitals—were purposefully engineered to be cumbersome and undercut public health programs.
“The paperwork burden will lead to eligible people being denied,” according to the nonprofit California Healthcare Foundation.
In one new rule, Medi-Cal participants starting in January must prove eligibility every six months instead of annually.
Deepening effects
One Santa Barbara Medi-Cal enrollee told the News-Press Thursday she considers healthcare a right. The 48-year-old said she moved to California five years ago from a European country with socialized health care specifically to enroll in CenCal Health.
“It’s a big deal,” said the part-time worker, who asked to remain anonymous and expressed concern she might lose coverage to the new rules.
While counties have historically looked to the state to backfill federal funding gaps, analysts say HR 1 makes that more difficult. Tax restrictions in the bill, for example, alter the state’s ability to fund Medi-Cal.
“H.R. 1 creates a limitation on various provider taxes, which California uses to finance much of the state’s share of Medi-Cal and to draw federal matching funds,” according to the nonprofit healthcare foundation. “Two of those levies, the managed care organization tax and the hospital quality assurance fee, generate billions of dollars annually.
“By freezing current tax rates and requiring California to gradually reduce rates from 6% to 3.5% beginning in 2028, the state stands to lose a key funding stream,” according to the foundation.
Some relief
In the $351.7 billion fiscal hear 2026-27 state budget passed in late June, Sacramento lawmakers did provide some relief, a one-time expenditure of $420 million for Medi-Cal programs and CalFresh initiatives also on the chopping block.
Saving Santa Barbara county an estimated $6.6 million, the funding extended for 12 months a specific type of Medi-Cal reimbursement aimed at undocumented individuals who do not qualify for federally funded Medicaid.
In response, the Santa Barbara County Health Department announced the rehiring of 15 employees laid off days earlier—a pharmacy technician, seven nurses, two medical assistants and five office staff members.
Still unanswered is a request to the state from California county officials seeking a combined $512 million in funding to support Medi-Cal enrollees impacted by the new work requirements in the current and next fiscal years.
“There are still discussions happening,” Kelly Brooks, a Sacramento-based legislative consultant, told the county Board of Supervisors on Tuesday. “It’s definitely on the table, and there’s interest in the legislature in trying to address that.”
Local solution-seeking
In Santa Barbara County, officials say more than 163,000 people are enrolled in Medi-Cal, or roughly one out of every three residents.
At CenCal Health, the CEO Owen said area officials are cautiously optimistic further state action will come prior to the departure of outgoing Gov. Gavin Newsom.
Still, she said, significant traction is more likely with the next administration—assuming Democrat Xavier Becerra, the frontrunner in the race for governor, wins in November.
“It’ll be nice when we have long-term focus again for California,” Owen said.
In the absence of more state or federal funding, local leaders are looking for other creative ways to stem the losses.
CenCal Health administrators have tapped $12 milllion of the agency’s reserves to help pay physicians and support nonprofits that can help Medi-Cal enrollees navigate eligibility, Owen said, adding a public-facing online hub designed to further assist participants also is in the works.
In addition, CenCal Health might help support a Santa Barbara County program that serves 4,500 to 5,000 Medi-Cal recipients considered to be among the most vulnerable in the county.
And CenCal Health also might through its own nonprofit arm fund programs aimed at impacted children or seniors, Owen said.
“None of us can backfill HR 1. It’s just too much money,” she said. “We’re just trying to all work together.”
