How Federal Budget Changes Affect California ARFs and Where to Find Support
California’s Adult Residential Facilities (ARFs) are confronting a perfect storm of financial and policy pressures.
Earlier this year, Congress approved the One Big Beautiful Bill (OBBB) Act (H.R. 1), a sweeping budget reconciliation bill that makes significant cuts to social safety net programs like Medi-Cal (Medicaid), CalFresh (SNAP), and other essential services that Californians rely on.
These federal budget changes are creating new challenges for ARFs, especially small and mid-sized facilities, putting residents’ care and stability at risk. Thankfully, opportunities do exist through Regional Centers, grants, and other local programs to help facilities stay financially stable and continue providing quality care.
Key changes that will directly affect California counties and providers:
- SNAP/CalFresh: By 2029, California will have to cover up to 15% of SNAP food benefit costs and a larger share of program administration (going from 50% to 75% by 2027). Since many ARF residents rely on these benefits, facilities may see reduced or delayed support for food and other essential services. This could strain both the residents’ daily living resources and the ARFs’ budgets.
- Medi-Cal: Starting in 2029, most adults on Medi-Cal aged 19-64 will need to work or do community activities for 80 hours monthly to retain coverage. From 2028, small fees (up to $35) will apply to some services, but primary care, behavioral health, and others are exempt. New requirements may cause some residents to lose coverage if they can’t meet the 80-hour threshold. Even with exemptions, ARFs might need to help residents comply, raising staff workload and risking coverage loss.
- Sequestration Cuts: Since the bill will increase the federal deficit, this will trigger automatic spending cuts, slashing Medicare funding by up to $500 billion over 10 years and eliminating some human services programs. These cuts threaten county hospitals, clinics, and local services, possibly reducing essential healthcare and support for residents. County facilities vital for ARFs might face capacity issues, impacting care.
Many ARFs already operate on tight budgets, relying on SSI-level funding and county “patches” to stay open. Added pressures from federal budget changes make it harder for smaller facilities to survive, could force closures or consolidation, and limit access to local, community-based care.
Explore these resources to find funding, support, and tools that can help your facility thrive and better serve your community.
The California Association of Local Behavioral Health Boards and Commissions provides a statewide grants list and a listing of local resources for ARFs on its website.
California’s 21 Regional Centers regularly share Requests for Proposals (RFPs) for programs and services they are seeking, sometimes with grants and additional funding attached. These pages are updated frequently, so it’s important to check back often.
Central Valley Regional Center
Eastern Los Angeles Regional Center
North Los Angeles County Regional Center
Regional Center of the East Bay
Regional Center of Orange County
San Gabriel/Pomona Regional Center
South Central Los Angeles Regional Center
Valley Mountain Regional Center
Not sure which region you’re located in? Check out the Look-up tool!