Rep. Costa Brings Together Central Valley Health Care Providers to Discuss Federal Funding Challenges

FRESNO, Calif. - This week, Congressman Jim Costa (CA-21) met with Central Valley health care providers to discuss challenges facing local hospitals and clinics. The roundtable focused on the impact of federal funding reductions under H.R.1, including changes to Medicaid and the Affordable Care Act, and explored opportunities for federal support amid record-low ACA enrollment.

"Last year, Republicans made the largest cuts in history to Medicaid and the Affordable Care Act in the ‘big ugly bill,’ leaving our Central Valley, and communities across the country, to make the hard decision of shifting priorities, making cuts, and adding strain to an already overloaded health care system," said Rep. Costa. "Providers had to make difficult choices about staffing, patient care, and services, and many programs and expansions were delayed or scaled back. I met with local providers to hear firsthand how these changes have affected their operations, understand the challenges they face in serving our communities, and discuss opportunities for federal support as we work to ensure residents can access quality care.”

"We appreciate Congressman Costa for bringing together health and medical education leaders to discuss the challenges facing the Central Valley health care landscape," said Jose M. Barral Sanchez, MD, PhD, Vice Dean at the UCSF Regional Campus in Fresno. "Supporting medical education and training our own health care professionals is essential to addressing the physician shortage and meeting the health care needs of our communities."

Background

H.R.1 and Impacts on Hospitals and Medicaid

In July 2025, President Trump and Congressional Republicans passed H.R.1, a sweeping budget reconciliation bill. The legislation enacted over $1 trillion in cuts to core health programs, including Medicaid, CHIP, Medicare, and the ACA. These reductions directly affect hospitals, clinics, health care workers, and the 1.8 million residents in California’s Central Valley who rely on these programs.

Key provisions of H.R. 1 include:

• Block Grants and Per Capita Caps: Federal Medicaid contributions are capped, reducing funding flexibility for states during economic downturns or health crises.
• Elimination of the 90% Federal Match for Medicaid Expansion: Funding for states that expanded Medicaid under the ACA was cut by $600 billion, forcing states to cover costs or reduce services.
• Biannual Eligibility Redeterminations: Starting in 2026, states must verify Medicaid eligibility every six months, increasing administrative burdens and risking coverage losses.
• New Work Requirements: Adults aged 19–64 must work or participate in training/community service 80 hours per month to maintain coverage, which could result in coverage loss for millions.
• Increased Cost-Sharing and Reduced ACA Marketplace Subsidies: Low-income individuals face higher out-of-pocket costs, and DACA recipients are barred from ACA marketplace coverage.
• Restrictions on State Financing Tools: Limits on provider taxes and directed payments may undercut funding for hospitals and clinics that rely on Medi-Cal reimbursement. 

Rural Health Transformation Program (RHTP) and Rural Hospital Relief Fund 

H.R.1created the $50 billion RHTP to strengthen rural health systems nationwide. California was awarded $233.6 million this year (FY26) to support sustainable access, workforce development, technology modernization, and care coordination in rural areas, including the San Joaquin Valley. 
The state will determine allocations for individual hospitals and clinics, with priority given to facilities formally designated as rural or facing financial distress. 

While these funds provide targeted support, they are not sufficient to offset the broader reductions enacted under H.R.1. 

To view photos of the meeting, click here.