Virginia lawmakers presented a compromise budget late last week that did not include a plan to directly address possible federal funding cuts to the state’s Medicaid expansion.
The General Assembly passed statewide Medicaid expansion in 2018, which provides health insurance for adults younger than 65 who earn up to 138% of the federal poverty level. That law, signed by Democratic Gov. Ralph Northam, includes trigger language that automatically terminates the program if federal funding falls below 90%.
On Tuesday, Republicans in the U.S. House of Representatives narrowly passed a budget calling for $880 billion in cuts, which would impact social safety net programs like Medicaid. Congress will now negotiate between the House and Senate’s version of the budget, which could be a lengthy process, given Republican’s narrow margins in both chambers.
If these cuts end up in a final budget deal, they would essentially disassemble the commonwealth’s expanded Medicaid coverage.In Virginia, nearly 2 million Virginians rely on Medicaid for health care coverage, including 630,000 Virginians who receive coverage through that Medicaid expansion.
As VPM News previously reported, state Sens. Creigh Deeds (D–Charlottesville) and Ghazala Hashmi (D–Chesterfield) had introduced a budget amendment that would have set out a plan if the federal government cuts Medicaid funding.
Hashmi told VPM News she’s “very concerned” about what could happen to those people if the federal government makes cuts to Medicaid.“Virginia will move immediately to disenroll and eliminate coverage for everybody who was part of Medicaid expansion,” she said.
Had the proposal been included in last week’s Joint Committee Conference Report, it would have established an oversight review group to determine alternate funding sources and provide recommendations within 45 days of the passage of federal law.
Hashmi said the proposal failed because it didn’t have a sponsor from the House of Delegates, so negotiators punted it during budget discussions.
Currently, Virginia’s private hospitals cover the remaining 10% of costs for Medicaid expansion. That annual cost for coverage is about $571 million, according to Julian Walker, a spokesperson for the Virginia Hospital & Healthcare Association. The federal government pays about $5.1 billion annually into the commonwealth’s system.
“Given the financial challenges that many hospitals in Virginia already have, especially rural hospitals, it would not be financially feasible for hospitals to bear additional costs beyond what they’re already contributing,” Walker said. “Any significant change to how Medicaid is funded would have serious implications and consequences both for providers as well as for patient access to care, and that includes many rural Virginians and rural providers as well.”
Freddy Mejia, a Medicaid coverage advocate and policy director at The Commonwealth Institute, said he’s “disappointed” the senators’ language specifically addressing the trigger law didn’t make it into the budget draft.
“We see this as a missed opportunity,” Mejia said. “Our ask was for state lawmakers to clarify a process or give themselves an opportunity to weigh in before the potential of actual coverage loss due to federal actions.”
Mejia said state budget negotiators did include a provision that could help address cuts to federal grants exceeding $100 million, which would include Medicaid.
The language requires the state’s Department of Planning and Budget to provide a fiscal impact estimate to Republican Gov. Glenn Youngkin and chairs of both the Virginia House and Senate appropriations committees within 30 days of federal change. It also requires the governor to consult with legislative leaders about calling a special session to respond to federal funding reductions. This language does not provide protections for Medicaid expansion recipients against disenrollment, nor does it give the General Assembly an opportunity to respond prior to a loss of coverage.
Youngkin has committed to fulfilling Virginia’s existing obligations of funding Medicaid. His proposed budget provided $687 million for the program and its forecasted expenses, but he’s expressed concern for increasing costs associated with Medicaid.
His budget also calls for the Joint Subcommittee for Health and Human Resources to respond to any federal changes to health care. The committee is made of five members from each chamber and chaired by Del. Mark Sickles (D–Fairfax). Hashmi told VPM News she is confident in the committee’s ability to respond quickly with recommendations, even though the 45-day requirement didn’t make it into the budget.
State Sen. Bryce Reeves (R–Orange), a member of the committee, said states should worry about their Medicaid recipients regardless of who is in the White House.
“We have not gotten any indication from the Trump administration that they plan to make cuts to Medicaid,” Reeves told VPM News in an emailed statement. “They will be looking for fraud and abuse and ways to hold unethical recipients and providers accountable to be able to recover resources that would otherwise be going to legitimate needs.”
If there is a reduction in federal funding for Medicaid, Virginia’s Legislature can call itself back into special session with 48 hours’ notice.
State health care advocates are now turning their attention from the General Assembly to the federal government. More than 20 organizations — including New Virginia Majority, the Virginia Education Association and the Virginia Rural Health Association — signed on to a letter sent to the state’s congressional delegation Monday, asking them to protect benefits such as Medicaid.
“Virginia is particularly vulnerable to this program, as even a 1% reduction in funding from the federal government for Medicaid expansion would immediately lead to over 630,000 Virginia residents losing access to critical health coverage,” the letter reads.
