Local homeless-services providers in San Diego County are sounding alarm bells as proposed cuts to the federal Medicaid program risk destabilizing key supports for people experiencing homelessness.  

At the heart of the concern is The Compass Station and similar agencies that rely on Medicaid-funded wraparound services — such as mental-health care, substance-use treatment, and housing support — to serve clients with complex needs. With new guidance and looming budget pressures, many providers say they face deep uncertainty.  

“This isn’t just about a change on paper,” one outreach leader said. “When you strip away the health-care supports, you strip away the pathway out of homelessness.” According to advocacy groups, the ripple effects of cutting Medicaid funding may include increased emergency room visits, longer stays in shelters, and fewer housing placements.  

Across California, systems already strained by escalating rents and rising unsheltered populations are bracing for a blow. In San Diego County, the potential loss of vital services comes just as municipalities are working to reduce homelessness through prevention and supportive-housing programs.  

Providers are calling for urgency from local and state leadership to coordinate contingency plans—including identifying alternative funding, phasing program transitions, and protecting the most vulnerable clients during the shift. Without proactive action, advocates warn the region could see a dramatic erosion of progress in homelessness services.