State Budget Outlook and New Department Policies
With both state and federal budgets still in flux, we are taking measured steps to navigate uncertainty in the months ahead. I want to share a brief update about what we know so far and share what we are working on to ensure Contra Costa Health remains stable and focused on its mission.
To start, we are implementing two department-wide policy changes, effective today:
- Hiring pause. Any new hiring or filling of current vacancies must receive freeze approval from the Office of the Director.
- Travel approval. All out-of-county travel will require prior approval from the Office of the Director.
These measures are intended to help us manage resources carefully while we learn more about the evolving budget picture. If you have questions or need to request an exception, please contact your division head.
Earlier this month, Governor Newsom released his revised state budget proposal (the “May Revise”). While the final budget will be negotiated through June, some proposals, especially around Medi-Cal, could affect many of the people we serve.
The most significant proposed changes include ending new Medi-Cal enrollment for adults with unsatisfactory immigration status in January 2026, and requiring those who remain enrolled to pay a $100 monthly premium beginning in 2027. If adopted, these changes could cause as many as 40,000 CCH patients to lose their healthcare in the next two years.
CCH is the safety-net provider for our County, so I want to assure everyone that we will continue to serve this population. However, when patients have less access to primary and preventive care, we are more likely to see them only when their health concerns become serious enough to drive them to emergency departments.
The May Revise also proposes ending enhanced reimbursement rates for undocumented adult visits at our Federally Qualified Health Centers, meaning we would receive much less funding for the same care.
Altogether, these proposed changes could result in as much as $25 million in reduced revenue in FY 2025–26, and up to $35 million in FY 2026–27. Federal funding changes are also expected later this year, adding to the uncertainty and potentially further reducing the number of people eligible for Medicaid (Medi-Cal). Our county leadership is working with our state and federal partner organizations to protect health coverage as much as possible.
It’s important to note that CCH does not currently anticipate any reductions in services or staff. The transformation efforts already underway are helping us stay adaptive and resilient.
Before closing, I want to take a moment to acknowledge the recent passing of former Contra Costa Supervisor Federal Glover. Supervisor Glover was a lifelong public servant and steadfast champion for health and equity in our community. His leadership helped shape many CCH programs and partnerships. Our thoughts are with his family, loved ones, and the many people whose lives he touched.
I will continue to share updates as we know more. Thank you for your flexibility, thoughtfulness, and unwavering commitment to the people of Contra Costa.
Sincerely,
Ori Tzvieli, MD MS
Chief Executive Officer and Health Director (Interim)
Health Officer, Contra Costa County
