As partisan disputes boil, it’s still unclear how new federal law will impact Medicaid in Virginia

(Photo by Nathaniel Cline/Virginia Mercury)

The “big beautiful bill” was passed by both chambers of Congress and last week, President Donald Trump signed it into law, triggering a countdown until sweeping changes to Medicaid take effect, including potential coverage loss for millions nationwide, financial strain to hospitals and new work requirements for Medicaid recipients. While the changes won’t kick in for more than a year, Virginia lawmakers are already preparing for the transformation of the state’s health care landscape.

It’s still unclear exactly how many Virginians could lose Medicaid coverage because final analyses from the nonpartisan Congressional Budget Office (CBO) haven’t dropped yet. The uncertainty has left many wondering if they or loved ones will be impacted — and set the stage for partisan bickering. 

Democrats have warned for weeks that over 332,000 Virginians could lose health insurance, based on a state-by-state breakdown from the U.S. Senate’s Joint Economic Committee and previous CBO estimates released as the bill made its way through Congress.

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Gov. Glenn Youngkin said Tuesday that figure is  “literally made up,” while other Republicans have pointed to a  7-year-old state study, conducted before Virginia expanded its Medicaid program in 2018, to claim far fewer would be booted from Medicaid. 

Clearer understandings of just what will happen to Medicaid in Virginia and other states may be best found in future OMB reports but its most recent estimates found 10.8 million Americans nationwide could lose insurance as a result of the bill 

‘A moving target’

The bill’s rapid race over the finish line, from the House to the Senate to Trump’s desk in a span of mere weeks, could be the root of confusion about its full impact concerning health care, and lawmakers’ differing interpretations. Analysts and organizations tracking the legislation also tried to keep pace. 

“We did do far more analysis of the bill as it passed the House back in May, including a conventional estimate, a dynamic analysis, information on the distributional effects, health insurance loss estimates, information on SNAP benefit changes, etc.,” Caitlin Emma, chief of media relations for CBO, wrote in an email. “Things started moving quickly once the bill headed over to the Senate and the demands on CBO during the legislative process started to ramp up.”

Freddy Mejia, a policy director with The Commonwealth Institute, noted the whiplash lawmakers and analysts experienced trying to keep track of the House and Senate versions of the OBBB. 

The impact between the two different bills is “kind of a bit of a moving target,” he said. 

He plans to keep an eye out for further reports from CBO now that OBBB has fully passed. 

On a national scale, Democrats have stressed that the number of Americans facing the loss of their Medicaid coverage could be close to 17 million. This, Emma said, is because CBO created another analysis with provisions that weren’t in the bill that passed, but which could also have an effect: expiration of ACA premium tax credits and a proposed Health and Human Services rule for marketplaces. 

“Both of those we totaled at 5.1 million, which is why you subsequently saw a lot of Democrats adding 10.8 million + 5.1 million to get nearly 16 million, or adding it to our Senate total to get nearly 17 million,” she said. 

Beyond just health insurance, CBO estimated that in general, resources would decrease for lower-income households while increasing for middle class and higher-income households. That supposition, however, stems from the House version of the bill, supported by Virginia Republican U.S. Reps. Jen Kiggans of Virginia Beach and Rob Wittman of Westmoreland, which did not become law. Fresh CBO review could reveal how people in different income brackets will fare with the new law overall.

Old data, new frustrations

State Republicans’ allegations that Democrats’ Medicaid coverage loss estimations were inflated first circulated as the big beautiful bill wound through congress. This week, the debate came to a head with Youngkin accusing Democrats of “extreme assumptions” at an event announcing a slate of regulatory reductions on Tuesday.

“The number that Democrats are throwing around on Virginians who will lose their health coverage is made up,” Youngkin said Tuesday while talking with the media at the event. “They choose extreme assumptions in every measure.”

It’s unclear what data Youngkin is using to refute Virginia Democrats’ Medicaid loss estimates and members of his staff did not respond when asked.

Meanwhile, Republicans in Virginia’s House of Delegates have cited n a 2018 study from the Joint Legislative Audit and Review Commission (JLARC). Garren Shipley, a communications staffer for the House Republican Caucus, shared the study with emphasis that the party doesn’t believe mass disenrollment would happen because of Congress’ bill. 

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Like CBO, JLARC is a nonpartisan research entity in state government that lawmakers often tap to study various issues. The 2018 JLARC study Shipley referenced came the same year Virginia expanded its Medicaid program. 

At the time, JLARC estimated that about 32% of Virginia’s Medicaid expansion population would be subject to work requirements and 7% would be deterred from enrolling or leaving the program due to the requirements. 

As the JLARC study is over seven years old, it’s likely some of its estimations are no longer relevant or accurate. What is certain, however, is that changes to Medicaid requirements and hospital funding mechanisms are on the horizon. 

Work requirements, risk to hospitals

Youngkin also framed the work requirements as an important part of Medicaid reform. It’s something state lawmakers had initially considered when expanding the program seven years ago. The new law will require those receiving Medicaid benefits to work XYZ brief description of work requirements, which some lawmakers and advocates say are either unnecessary because many recipients already work, or needlessly burdensome to those living with a disability.

“Redetermination is a really important process,” he said. “It asks us to redetermine every six months, and that gives us a chance to assess who’s gotten a job, (and) who hasn’t complied with the work requirements.”

Youngkin emphasized how Medicaid is supposed to ensure that the “deeply impoverished,” mothers, and children have health insurance rather than able-bodied people “who can get a job and have simply chosen not to.” 

Most Medicaid recipients do work, though some like Richmond-area resident Andrew Daughtry, currently do not. A construction worker, he’s tapped into Medicaid for surgeries to recover from an injury that’s left him temporarily unable to work. Earlier this summer he said that it felt “insulting” to have his work ethic questioned.

The twice-yearly employment verification is meant to kick people off their insurance if they aren’t able to keep their jobs while the phase-down of Medicaid provider taxes and state-directed payments are also meant to curb costs for the federal government. 

But hospitals warn of heightened chances for closures — particularly in rural areas —- or trimming of offered services and staff. Several hospitals in Southwest and South Side Virginia had already closed obstetrics units, for example, prior to the new congressional bill.

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Julian Walker, spokesman for the Virginia Hospital and Healthcare Association, reflected on the intent of the Affordable Care Act — a hallmark law of Democrat Barack Obama’s presidency that allowed states to expand their Medicaid eligibility to provide health care to more people to begin with.  The law was about keeping people insured and healthy in order to keep everyone’s bills down. 

“The impact is not exclusive to the Medicaid population,” Walker said. “It has ripple effects.” 

He noted that uninsured people are likely at or closer to poverty levels than insured people. Without health coverage, they’re more likely to put off preventative care or seek treatment for conditions until emergencies arise. 

Walker said people’s conditions are likely to be worse by then — requiring more resources between staff, medications, treatments and length of stay in a hospital. Longer stays mean less available beds for others, regardless of Medicaid status.

Ballad Health CEO Alan Levine, remained vocal on social media throughout the reconciliation process to warn that some hospitals would be strained and likely to close. Sometimes, he tagged Virginia’s congressional Republicans, whose districts include rural hospitals and sizable amounts of Medicaid patients. 

Hospitals are also federally required to provide care regardless of whether someone can pay their bills or not, so they absorb that cost while also trying to offset it. As hospitals periodically negotiate with private health insurers, Walker said rates will likely go up for employers and employees with private insurance. 

“Different constituencies may feel the impacts differently,” Walker said. “Some more than others — but this has potential to have much more far-reaching implications.”

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