Distressed Hospital Loan Program 2.0, AB 1923, Passes Assembly Health Committee

• Brody Fernandez
• (916) 276-3390
• [email protected]

SACRAMENTO, CA -Assemblywoman Esmeralda Soria (D-Merced) introduced AB 1923, an update and new round of $300 million in funding to the Distressed Hospital Loan Program (DHLP), which was created in 2023 to help re-open Madera Community Hospital and prevent other hospitals throughout the state from closing. AB 1923 passed unanimously with bipartisan support this week out of the Assembly Health Committee. Signaling how important the legislature considers this program to be funded again, because of severe healthcare cuts from H.R.1.

"The risk of losing access to critical healthcare services for Californians has never been greater than right now. That's something I hoped I would never say AGAIN," Assemblywoman Soria said. "Hospitals serving small and rural populations are facing a financial cliff right now, thanks to the largest federal healthcare cuts in history. A wave of hospital closures threatens the health and well-being of all Californians, especially those living in underserved areas throughout the Central Valley."

DHLP was created in 2023, in-part from legislation authored by Assemblywoman Soria and State Senator Anna Caballero (D-Fresno). The $300 million program helped successfully reopen Madera Community Hospital in March of 2025 and prevented other hospital closures across the state.

AB 1923 updates DHLP by infusing it with an additional $300 million in new funding, clarifies new loan forgiveness terms, and ensures hospitals at risk of closure can participate in future funding rounds.

"The DHLP has been a lifeline for hospitals on the financial brink," said Carmela Coyle, President & CEO of the California Hospital Association. "We are grateful to Assemblymember Soria for her commitment to keeping hospitals open so they can continue to serve their communities and so Californians have peace of mind that hospital services will be there when they need them. No hospital in California should be allowed to close."

Under normal circumstances, DHLP would address financial distress created by federal funding cuts and other financial issues facing the hospital industry, but the program's existing funding has been depleted, and it was not built to withstand additional, unprecedented federal cuts.

Without revisiting these issues, there is a major risk that hospitals will close, service lines will be cut, and a large number of healthcare jobs will be lost in California.

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Assemblywoman Esmeralda Soria represents the 27th Assembly District, which includes communities in Fresno, Madera, and Merced counties.