President Donald Trump’s One Big Beautiful Bill Act may turn San Francisco’s healthcare system into one big beautiful mess. 

The new work requirements under the bill HR1 may result in 45,000 San Franciscans losing healthcare within two years, according to city estimates. Roughly 21,000 people may lose eligibility for CalFresh, the food stamp program.

Mayor Daniel Lurie plans to leverage city coffers to fill in the gaps, even as he balances mounting pressure to prevent layoffs and maintain nonprofit grant funding amid a fiscal crisis.

Lurie is allocating $34 million from the city’s federal funding reserve to keep people enrolled in the Medi-Cal and CalFresh programs, his office shared exclusively with The Standard. 

“Even though we have zero funding from the feds to do this, and zero funding from the state to do this, we are taking it as our responsibility as a city to help [people] meet those work requirements,” said Trent Rhorer, executive director of the Human Services Agency.

It’s the second and largest withdrawal from the fund since its creation last year to buttress San Francisco against financial turmoil from an unpredictable president. 

Lurie is moving to intervene in the hope of keeping residents enrolled before deadlines hit. CalFresh work requirements take effect in June; Medi-Cal follows in January, with a requirement of  80 hours a month to maintain coverage, along with stricter reporting schedules. The city isn’t acting out of compassion alone: If those 45,000 people lose healthcare coverage, San Francisco could absorb up to $400 million in uncompensated costs, the city estimates. Prevention, Lurie is betting, is cheaper than the alternative.

The fund will pay for the hiring of more than 150 staffers at the Human Services Agency, the city department that confirms eligibility for Medi-Cal and CalFresh, processes the paperwork, and provides other support. They join the roughly 760 who are already with the agency and will help San Franciscans navigate — and survive — the new federal paperwork requirements before deadlines hit. 

Intending to cut what he called “waste and fraud” in Medicaid, Trump in July signed HR 1, a bill of nearly 1,000 pages (opens in new tab) filled with huge cuts to the social safety net, ramped-up Immigration and Customs Enforcement funding, and tax breaks. The law’s twice-annual reporting requirements may result in as many as 10 million people (opens in new tab) losing healthcare nationally by 2034. Medicaid, the national program known as Medi-Cal in California, insures the lowest-income Americans, seniors, and people with disabilities. In San Francisco, the funds support safety-net providers like Zuckerberg San Francisco General Hospital and the Laguna Honda Hospital, a hospice.

Lurie is due to deliver his proposed budget to the Board of Supervisors at the end of the month. He is legally mandated to close the $643 million deficit; to get there, he has laid off 127 of the city’s roughly 34,000 workers, with more cuts expected by June. 

“While federal cuts make it harder for San Franciscans to access health care and put food on the table, this budget will protect our city’s social safety net and help residents stay on the benefits they rely on,” Lurie said, in a statement. “We are delivering a responsible budget that prioritizes core services, safeguards vulnerable communities, and continues San Francisco’s broad, durable economic recovery.”

In balancing the budget, Lurie must also weigh how much of the city’s tax dollars to spend to backfill any federal cuts coming San Francisco’s way, even as those risks aren’t immediately clear.

To that end, Lurie and the Board of Supervisors last year placed $400 million into the newly created Federal and State Revenue Risk Reserve, some of which is paid for by $220 million in unused medical reimbursement accounts, a pot of money raised through controversial fees that restaurant owners argue hurt local businesses. 

Lurie is proposing to tap into that money to help CalFresh and Medi-Cal recipients. 

The economic ripple effects extend beyond healthcare. The local economy may take a hit of about $6 million monthly from lost CalFresh enrollment alone — a loss felt most sharply at corner stores, where as much as 80% of sales can come from CalFresh recipients.

The Department of Public Health is also using its budget to buttress the loss of Medi-Cal, redirecting funds to beef up the Healthy San Francisco program, the city’s stab at universal healthcare in 2007, when Gov. Gavin Newsom was mayor, prior to the passage of the Affordable Care Act.

“We’re leveraging all of our resources to help people connect to Medi-Cal coverage,” said Dan Tsai, director of the Public Health Department. 

The funding isn’t Lurie’s only prescription for the crisis. The Human Services Agency is launching a website that will direct people to work and volunteer opportunities to meet the new work requirements, courtesy of the Mayor’s Office of Innovation. And to meet San Franciscans where they are, the Human Services Agency has rolled out a mobile enrollment truck equipped with staff and all the needed paperwork (opens in new tab) — have forms, will travel.

Rhorer said there’s a misconception that some people don’t want to meet the new Medi-Cal requirements. Some have jobs, he said, but can’t work enough hours to meet healthcare requirements. Others can’t find a gig at all.

The perception of widespread laziness is “just not reality,” Rhorer said. “People don’t choose to be poor. People don’t say, ‘I’d rather not have any money.’ People are literally struggling to find and retain employment.”