Health insurance for millions of Americans is the core issue of the current government shutdown. Beyond extending Affordable Care Act subsidies, the bigger looming issue is the changes to Medicaid under the One Big Beautiful Bill Act (OBBBA). The law imposed new requirements, such as semi-annual re-verification, monthly work reporting and cost-sharing fees.

But while Congressional debates often frame Medicaid as math — eligibility formulas and budget scores folded into large legislative packages — states and counties have to determine who goes without care and how to address financial impacts on hospitals and clinics.

On paper, these look like minor tweaks. On the ground, they introduce major fiscal and administrative burdens — both for Medicaid recipients and for the local health systems that serve everyone.

Federal policy is layering on new administrative burdens, but this moment is also an opportunity to redefine the role of counties in America’s health federalism.

Counties at the center of Medicaid

While they were not at the center of the OBBBA debate in Congress, county governments are deeply interwoven with Medicaid-related service delivery, administration and funding.

According to the National Association of Counties, counties play a critical role in delivering health services (operating thousands of county healthcare facilities), administering benefits (counties directly administer Medicaid in nine states), and financing care (contributing to the non-federal share of Medicaid in half of states).

Because they are both running eligibility systems and providing safety net care, many counties face double exposure when administrative burdens increase. Each new form or reporting requirement drives up enrollment costs and raises uncompensated care when coverage lapses.

In ways that might not be clear from the Congressional perspective, counties are frontline healthcare operators whose budgets, health systems and staff absorb the real-world consequences of federal rules.

Snapshots from 25 counties

In order to highlight the important role of counties in Medicaid, we partnered with the California State Association of Counties to understand how OBBBA changes will impact county-level health and economic systems.

Then, over the course of 12 weeks, a team of researchers from the Counties RISE Initiative at UC Berkeley’s Goldman School of Public Policy met with Medicaid policy leaders from more than 25 counties across California, from dense urban centers to rural communities in the Sierra foothills. The goal was simple: to hear directly from the people who administer Medicaid policies on the ground.

We translated those conversations and relevant data into customized Medi-Cal policy snapshots for each county. Each one reflects not just the numbers, but the questions and concerns county officials told us mattered most — what shrinking coverage means for families, hospitals and local economies.

These snapshots reveal how broad federal shifts play out in practice: delayed clinic expansions, emergency room bottlenecks, budget trade-offs. Together, they illustrate what counties across the U.S. will face as administrative burdens expand in the coming years with OBBBA.

Administrative and fiscal burdens for counties

In our research, we found that administrative burden is a useful lens for understanding how counties will be affected by OBBBA’s Medicaid changes. Defined by Don Moynihan and Pamela Herd, it captures the hidden costs people face in public programs:

• Learning costs. Figuring out rules, deadlines and documentation.

• Compliance costs. Paperwork, renewals and reporting.

• Psychological costs. Stress, stigma and frustration when systems feel punitive.

We extended this lens beyond individuals to include program administrators. Administering OBBBA Medicaid changes adds additional operational challenges, including increased staff, training and infrastructure to meet federal rules.

Under OBBBA, those administrative burdens also become fiscal burdens.

Ripple effects across local health systems

When Medicaid coverage slips for people in the community, counties can’t simply step back. Federal law — and in many cases, state law — ensures that someone still has to pay the bill. Under the law, hospitals must screen and stabilize anyone who walks through the emergency room doors, regardless of insurance status. Because nearly every hospital participates in federal health programs, these obligations are almost universal.

For counties, the responsibility runs even deeper. Many counties own or operate public hospitals, meaning these federal requirements translate directly into local fiscal exposure. States like California go further, requiring counties to provide indigent care for uninsured residents. The result: When coverage shrinks, uncompensated care spikes, and county budgets bend under the strain.

This infographic, used in the snapshots prepared for California counties, illustrates this “ripple effect.” (Note: Medi-Cal is the name of California’s Medicaid program).

Ripple effects across local economies

Beyond health care, Medicaid is economic infrastructure.

By covering low-wage workers, the program helps millions remain healthy, productive contributors to the economy. A 2025 study by the UC Berkeley Labor Center found that nearly one in five California workers is enrolled in Medicaid, underscoring how deeply the program is tied to the state’s labor force.

Medicaid spending also circulates directly through local economies. Program dollars pay the salaries of nurses and health aides, fund hospital and clinic renovations, and support health-related small businesses across the state. According to the same Labor Center study, every $1 in Medicaid spending generates nearly $1.85 in state economic output.

When coverage is lost because of administrative hurdles, those dollars disappear from local payrolls, construction projects and small business orders.

The scale of the risk is significant. The California Hospital Association projects that the OBBBA provisions could strip between $66 billion and $128 billion in Medicaid and Medicare revenue from California hospitals over the next decade. Losses of that magnitude will ripple far beyond health care facilities, weakening local economies and straining the fiscal health of counties.

Administrative burden is a policy choice

Administrative burdens are often intentionally designed. During the first Trump administration, the federal government explicitly invited states to add work and “community engagement” requirements to Medicaid via a CMS waiver.

Arkansas became the first, and most studied, implementation. Evidence from Kaiser Family Foundation and subsequent research shows that Arkansas’s 2018-2019 work requirement led to substantial coverage losses without improving employment among affected adults.

OBBBA follows the same trajectory by raising compliance friction: requiring semi-annual re-verification, monthly reporting and cost-sharing. Decades of Medicaid policy evidence and recent analyses show that more frequent redeterminations increase churn, reduce access to care, and raise administrative costs for agencies, plans and providers.

That’s precisely the opposite of what counties have been building toward.

What counties have been doing to reduce burdens

The county stakeholders we spoke with have been hard at work to reduce administrative burdens — both for enrollees and their staff. Examples of innovative projects include:

• Operational efficiencies for streamlining eligibility work. Adopting no-wrong-door intake systems; cross-training staff across Medicaid, SNAP and other programs; and optimizing call centers to balance workloads and reduce bottlenecks.

• Integrating data to improve care. Linking housing, behavioral health, correctional data and other types of data to enable providers to target high utilizers, reduce costly emergency interventions and improve continuity of care.

• Field-based care and community paramedicine to reduce ER burden. Deploying mobile clinics and established alternative destinations for non-emergency behavioral health calls to reduce dependence on overburdened ERs.

• Telehealth expansion for remote care. Delivering care via mobile phone or computer, increasing access for rural residents and those with mobility or transportation barriers.

These and other measures have helped reduce learning costs (making rules clearer, outreach better), compliance costs (fewer redundant steps, smoother renewals), and psychological costs (less frustration, more trust). They also help stabilize county health infrastructures — keeping hospitals open, services available and clinics staffed.

With changes at the federal level that will increase burden on patients and county staff, these kinds of innovative burden reduction techniques are now more important than ever.

Counties now stand at a decisive crossroads. They can absorb rising costs as passive implementers, or step forward as active architects of stronger, more resilient health systems.

This is the moment for county leaders — through budget priorities, board actions and executive leadership — to chart strategies that stabilize local systems, safeguard access to care and ensure residents can live healthy lives while contributing to a stronger local economy.

This post was originally published on Next City.