Santa Clara County Faces $223M Medicaid Revenue Loss Now

URGENT UPDATE: Santa Clara County is set to lose $223 million this fiscal year due to significant cuts in Medicaid revenues stemming from President Donald Trump’s recent budget bill. This alarming financial impact is just the beginning, with officials warning of an even steeper decline in revenues over the next several years.

As the first wave of financial repercussions hits, the county, which operates four public hospitals and 15 clinics, is scrambling to address the immediate fallout. With one in four residents relying on Medi-Cal, California’s Medicaid program, the cuts are poised to have devastating effects on healthcare access for vulnerable populations.

County Executive James Williams confirmed that the losses are already affecting multiple revenue streams essential for health services. These include vital supplemental payments that help cover the costs of care provided to Medi-Cal enrollees. “The magnitude of what we’re facing is quite large, and we don’t think it’s prudent fiscally to wait,” Williams stated. Immediate budget cuts are on the table as officials seek to save $200 million in healthcare costs, a process that will be reviewed by the Board of Supervisors in February.

In anticipation of these challenges, the county is bracing for an estimated $506 million loss in Medicaid revenues for the upcoming 2026-2027 fiscal year. This could lead to cuts in services, impacting critical healthcare delivery to residents.

The implications of these budget cuts are already being felt. While Regional Medical Center in East San Jose recently resumed labor and delivery services, the county had to close O’Connor Hospital’s maternity ward to balance resources. CEO Paul Lorenz acknowledged the tough decisions being made, emphasizing that the restructuring will lead to longer wait times for patients and further strains on healthcare services.

Additionally, the county is urging voters to consider Measure A on November 4, 2023. This sales tax increase could generate up to $330 million annually, helping to mitigate some of the losses. However, even with this measure, the county still faces a staggering gap of $139 million in lost federal revenue for the current fiscal year.

Board of Supervisors President Otto Lee expressed deep concern for the future of essential services, stating, “These cuts will inevitably impact our ability to continue to make progress in these areas.” Supervisor Margaret Abe-Koga echoed the sentiment, advocating for a thorough review of county priorities and revenue generation to prepare for impending budget crises.

The situation remains fluid as officials continue to assess the financial landscape. With every passing day, the urgency to address these budget cuts grows, leaving county leaders and residents alike anxious about the future of healthcare services in Santa Clara County. As the community awaits the outcome of the upcoming vote on Measure A, the clock is ticking on securing the necessary funding to sustain critical health programs.

As this situation develops, residents are urged to stay informed and engaged. The choices made in the coming months will shape the landscape of healthcare in Santa Clara County for years to come.