Federal cuts to social services will reshape Merced County’s budget for upcoming years, county supervisors warned at Tuesday’s meeting.
The Trump administration’s “One Big Beautiful Bill” introduced sweeping changes to Medi-Cal and CalFresh benefits since signed into law in July 2025.
“We’re going to be making generational decisions each year on the budget moving forward with this impact,” said Daron McDaniel, District 3 supervisor.
Half of Merced County residents use Medi-Cal, and more than 61,000 residents use CalFresh.
Eligibility for these services changed, according to Brendan McCarthy, a senior legislative health and behavioral health advocate with the California State Association of Counties, who gave a presentation at Tuesday’s meeting. Now, the responsibility to fund key programs is shifting to counties, he explained.
It could translate to $9.5 billion in yearly new costs for the 58 counties in California, McCarthy said. There could be additional unknown costs due to increased demand for public health services.
The impact to Merced County’s budget could be as high as $10 million, County CEO Mark Hendrickson said.
Supervisors discussed the imminent impacts on the county budget as a result.
“Times are going to get tough before they get better. And so as we start to go through this budget process, be mindful of that,” said Josh Pedrozo, District 2 supervisor.
Medi-Cal impacts
Work requirements are changing for Medi-Cal, beginning January 2027.
Childless adults with Medi-Cal will need to show they work 80 hours a month to remain eligible — including volunteer work. Their eligibility will be redetermined every six months instead of yearly as well.
Immigrants with legal status who lack citizenship will not be eligible for full Medi-Cal coverage, but they can access limited benefits, according to the presentation.
Emergency services for undocumented adults without children will now have a reduced share of financing services, from 90% to 50%.
Exempted people include persons younger than 26, such as foster youth or those who are medically frail. Guidance for exemptions will not be available until June, McCarthy said.
CalFresh impacts
California offers a food subsidy program to low-income residents, known as CalFresh.
The work requirements age was increased to 64-years-old. Additionally, the federal legislation removed exemptions for former foster youth, veterans and homeless people.
People with legal status but no citizenship will not be eligible for full CalFresh benefits.
County costs are slated to increase yearly in the state. The County Welfare Directors Association of California estimates county match requirements will cost counties $150 million for 2026-27 and $211 million for the following year, McCarthy said.
Merced County already is anticipating a reduction of $544,000 in Supplemental Nutrition Assistance Program education funding.
Hospitals and care
As people lose Medi-Cal services, they will lean more on the county for resources, McCarthy said.
Indigent care programs provide basic medical care to individuals who are unable to pay. It is not comprehensive healthcare coverage, McCarthy said.
Merced County’s Medical Assistance Program provides medical assistance to people unable to pay. Criteria is for individuals 200% below the federal poverty line, according to the county.
“The impacts of this becomes not just a healthcare issue, it becomes a public safety issue, because the dollars have to come from somewhere,” said Scott Silveira, District 5 supervisor.
How the budget will shift
Increased demands from the ‘One Big Beautiful Bill’ will change the county’s approach to the budget this year.
“We will be incredibly focused on and scrutinized position requests and program expansions. Each request must be carefully evaluated to determine whether it supports mandated responsibilities or discretionary programs,” County Chief Executive Officer Mark Hendrickson said during a mid-year budget review presentation.
As of February this year, the county reported a $1.2 billion adjusted budget. Most of this funding came from departmental revenue, at $961 million. The county anticipates to spend $921 million. Underspending is driven by departmental vacancies and underspent contracts, said Vanessa Anderson, deputy CEO.
The board will use the county’s general purpose revenue, $142 million or 11% of total funds to cover costs including indigent healthcare, Anderson said.
“As we are going into budget season and trying to prepare for a ‘26-’27 fiscal year, having all these unknowns, it’s got me a little bit concerned,” Silveira said.
