California Moves to Shield Medi-Cal from Federal Perform Requirements
As federal policy shifts threaten healthcare access for low-income Americans, California legislators are advancing a bill designed to protect Medi-Cal coverage from stringent work requirements embedded in H.R. 1, the “One, Substantial, Beautiful Bill Act” signed into law by President Trump on July 4, 2025. Assembly Bill 2161, introduced by Assemblymember Rob Bonta, seeks to counteract the Department of Health Care Services’ (DHCS) plan to apply federal work and community engagement requirements to state-funded Medi-Cal expansion adults, a move not mandated by the federal law itself.
The legislation responds to growing concerns that administrative barriers tied to compliance verification could lead to widespread loss of coverage, even among eligible individuals. DHCS estimates that up to 1.4 million Californians — approximately 30% of the ACA expansion population — could lose Medi-Cal eligibility by January 1, 2027, due to missed documentation or failure to meet reporting thresholds, despite remaining otherwise qualified for benefits.
Proponents of AB 2161 argue that the bill would prevent unnecessary disruptions in care by blocking DHCS’s extension of federal work requirements to state-funded populations, streamlining administrative processes through automation, and ensuring that all federally permitted exemptions are applied. It would also clarify notification procedures so beneficiaries understand how to maintain coverage before facing termination.
Understanding H.R. 1 and Its Impact on Medi-Cal
H.R. 1, officially known as the One, Big, Beautiful Bill Act, was enacted as Public Law 119-21 on July 4, 2025. Whereas the law includes tax provisions affecting individuals and businesses, it also mandates that, starting January 1, 2027, adults aged 19 to 64 enrolled in Medicaid expansion under the Affordable Care Act must meet work or community engagement requirements to retain eligibility. These activities may include employment, job training, education, volunteering, or caregiving.
Certain groups are exempt from these requirements under federal law, including pregnant and postpartum individuals, former foster youth, veterans, tribal members, and those deemed medically frail. Although, DHCS has indicated it intends to apply these rules to state-funded Medi-Cal expansion adults regardless of immigration status — a decision that goes beyond what H.R. 1 requires, according to policy analysts.
The Internal Revenue Service has noted that the law significantly affects federal taxes, credits, and deductions, with particular attention to provisions like the Working Families Tax Cuts, which established “Trump Accounts” for children. These accounts allow for a one-time $1,000 federal contribution per eligible child, with additional contributions permitted from families and employers under specific limits.
Evidence on Work Requirements and Coverage Loss
Research from the Kaiser Family Foundation (KFF) and the UC Berkeley Labor Center indicates that most non-disabled, non-elderly Medi-Cal members who are able to work are already employed. Data from 2023 show that 63% of this group reported working full-time or part-time, 14% were not working due to caregiving responsibilities, 8% were students, and 7% cited a disability or illness not qualifying for federal disability designation.
Despite high rates of existing work or caregiving, critics argue that the administrative burden of proving compliance leads to “paperwork” terminations — cases where individuals lose coverage not because they are ineligible, but because they fail to submit required documentation on time. This concern is supported by findings from Arkansas’s 2018 Medicaid work requirement pilot, which resulted in a decline in coverage without measurable improvements in employment outcomes compared to similar states without such policies.
Analysts warn that applying similar rules in California could reverse years of progress in reducing the uninsured rate, potentially increasing medical debt and worsening health outcomes among low-income residents, particularly in immigrant communities disproportionately affected by the state’s broader application of the rules.
How AB 2161 Would Protect Coverage
AB 2161 aims to insulate California’s Medi-Cal program from the most harmful aspects of federal implementation by:
- Prohibiting DHCS from enforcing H.R. 1’s work and community engagement requirements on state-funded Medi-Cal expansion adults;
- Requiring the employ of automated data systems to verify eligibility and reduce reliance on manual paperwork;
- Ensuring that all federally allowable exemptions and exceptions are applied uniformly;
- Mandating clear, timely communication to beneficiaries about how to demonstrate compliance and avoid coverage gaps.
By focusing on administrative efficiency and clarity, the bill’s sponsors say it seeks to preserve access to preventive care, chronic disease management, and mental health services for vulnerable populations while minimizing unnecessary churn in the Medicaid system.
Stakeholder Perspectives and Next Steps
Health access advocates, including the organization that originally highlighted the bill, have welcomed AB 2161 as a necessary safeguard against coverage loss driven by bureaucratic hurdles rather than actual ineligibility. They emphasize that maintaining stable health insurance is critical for managing conditions like diabetes, hypertension, and maternal health, especially in underserved communities.
As of April 2026, the bill is under consideration in the California State Legislature. No vote has been scheduled in either the Assembly or Senate, and DHCS has not issued final guidance on how it will implement the federal work requirements for the state-funded population. Officials recommend monitoring the California Legislative Information website and the DHCS portal for updates on committee hearings and public comment periods.
For individuals concerned about potential changes to their Medi-Cal eligibility, experts advise keeping personal information current with their county human services agency and preserving documentation of work, education, or caregiving activities.
Staying informed through official channels remains the best way to prepare for any upcoming changes to eligibility rules that could affect access to care in 2027 and beyond.