L.A. County health officials ask state for emergency funds
The Los Angeles County Department of Health Services is lobbying California for a share of a $500 million emergency payment to prevent potential facility closures and staff layoffs. The request, coordinated through the California Assn. of Public Hospitals and Health Systems, seeks a one-time general fund payment in the 2026-27 budget to cover inpatient care for fee-for-service Medi-Cal patients at 17 public hospitals.
Dr. Christina Ghaly, director of LA Health Services, expects roughly 25%, or $125 million, of the requested funds to be allocated to Los Angeles County hospitals. Ghaly described the payment as a necessary “stopgap” and “lifeline,” specifically as the state proposes moving undocumented individuals from managed care into fee-for-service models.
Why are LA public hospitals facing financial losses?
Federal policy changes are driving a projected funding collapse. According to the Legislative Analyst’s Office, the One Big Beautiful Bill Act signed by President Trump alters Medicaid eligibility and includes approximately $1 trillion in federal Medicaid reductions over 10 years. This legislation is expected to cost California tens of billions in total Medi-Cal funding.
The impact on Los Angeles is significant because more than 80% of the system’s patients rely on Medi-Cal, according to Jorge Orozco, Chief Executive of Los Angeles General Medical Center. Orozco told a state Senate committee in March that about 660,000 people in LA County are expected to lose their Medi-Cal coverage.
Orozco noted that these individuals will not stop needing care and will likely continue visiting emergency rooms for routine and life-threatening conditions. He stated that safety net hospital systems will be forced to absorb those costs.
How is LA County attempting to cover the funding gap?
County officials have already implemented cost-cutting measures, including hiring freezes, consolidated services, and reduced overtime. These actions have resulted in approximately $230 million in savings, according to the department.
Voters also passed Measure ER, which Ghaly said will provide an estimated $220 million annually for the next five years through a new half-cent sales tax. However, the department estimates these measures are insufficient to stop a projected $700-million annual loss by the 2028-29 fiscal year.
What happens if the state does not provide emergency funding?
The department stated this week that it “cannot cut our way out of a funding loss of this magnitude.” Without state assistance, the department said it may be forced to consider reduced patient services, staff layoffs, and potential facility closures.
An April memo prepared for the Board of Supervisors warned that the strain of 600,000 additional uninsured patients would be felt across every emergency room in Los Angeles County. The memo stated that without new revenue sources, the system may have no alternative but to plan for service curtailments beginning in early 2027.
Dr. Ghaly clarified that the county has not yet identified specific services for closure, stating the current focus is on preventing harm before those choices become necessary.
Frequently Asked Questions
How much funding is LA County expecting from the state request?
LA County expects to receive roughly 25% of the requested $500 million, which totals approximately $125 million.
What is the One Big Beautiful Bill Act?
According to the Legislative Analyst’s Office, it is a federal law that alters Medicaid eligibility and includes about $1 trillion in federal Medicaid reductions over a 10-year period.
What measures has LA County already taken to save money?
The county has enacted hiring freezes, consolidated services, and reduced overtime, saving approximately $230 million.
How should local governments balance essential healthcare access when federal funding is reduced?