Rep. Salud Carbajal and hospital leaders in Santa Barbara, California, have warned that federal policy changes could leave thousands of Central Coast residents without health insurance and drive up premiums.

Here's what to know

Carbajal said Donald Trump's HR 1 bill could bring major fallout to the region. He argued that the law would strip back Medi-Cal — California's Medicaid program — for many working families and people living on fixed incomes, according to the Santa Barbara Independent.

Cottage Health, which operates a not-for-profit hospital system in Santa Barbara and elsewhere, could face an initial financial hit of about $40 million as the Central Coast prepares for nearly 40,000 residents to lose coverage and another 37,000 to see higher insurance costs.

More people could lose coverage when new rules take effect on Jan. 1, including stricter work rules and a requirement to requalify every six months for Medicaid and SNAP benefits.

"I think only time is going to tell how bad that impact will be to our communities in terms of displacement of those with healthcare, who will not be eligible for healthcare anymore," Carbajal acknowledged.

More background

The Independent reported that roughly one-third of Central Coast residents — about 256,000 people — are enrolled, and Cottage Health CEO Scott Wester said 25% of Cottage's patients use Medicaid.

When coverage disappears, many people first lose access to preventive care, which means medical problems worsen before they eventually lead to emergency room visits. 

Because the hospital still has to treat those patients, both families and the healthcare system feel the strain.

"Healthcare is pretty much at a breaking point as it relates to capacity, and that capacity strain is real," Wester admitted.

What's being done?

Cottage is already preparing with community partners, including Neighborhood Clinics, Family Service Agency, and CenCal, which manages the provider network for Medi-Cal beneficiaries. 

Wester explained that the goal is to help current Medi-Cal patients keep their coverage, understand the new requirements, and find affordable treatment.

The hospital is also hiring community health workers intended to act more like one-on-one health insurance guides. 

Wester said that will help patients keep their paperwork in order, stay informed about rule changes, and maintain consistent communication as the system becomes harder to navigate.

For those who still end up uninsured, Wester noted that Cottage's charity care policy can reduce or eliminate bills based on income, and a family of four earning up to $165,000 can qualify. He confirmed that patients will still be treated regardless of what happens in Washington.

For Wester, the crisis is deeply personal.

"It's not just about the cost to Cottage," he said. 

"These are real people, these are our neighbors. They aren't just numbers on a piece of paper. These are real individuals in our community that are going to be suffering, and we're going to do whatever it takes to make sure we provide the level of care they need."

Where can I learn more?

What Cottage is bracing for is part of a wider shake-up in health coverage across California and beyond. These stories cover looming Medi-Cal eligibility checks, rising premiums, and other benefit cuts affecting patients.

• California could see 2.2 million residents lose health insurance as federal changes unwind years of coverage gains.

• Across the U.S., higher health insurance bills are poised to hit workers and seniors.

• In Bakersfield, teachers are rallying as health coverage premiums rise after years of employer-paid benefits.

• Health Net's assisted living benefit cuts left 3,500 California seniors fearing displacement and homelessness.

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