Tag: Virginia

Alternative Headline: Virginia faces steep Medicaid cuts

[MM Curator Summary]: Virginia health leaders warn of massive coverage losses and funding cuts from new federal Medicaid reforms, while Gov. Youngkin frames them as necessary changes.

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Dr. Basim Khan has worked at Neighborhood Health, an Alexandria-based federally qualified health center, for 15 years. He got his start in primary care at Neighborhood Health’s Casey Health Center, and he still practices there — in addition to his duties as Neighborhood Health’s CEO, overseeing the organization’s 15 clinics across Northern Virginia.

“I love the communities we serve. I love the patients,” he says.

Khan is proud of Neighborhood Health’s role as a social safety net provider, serving uninsured and insured patients alike. And he’s proud of the organization’s growth, from a small practice in an apartment building serving women and children 25 years ago to what it is now: a network of health centers offering a wide range of medical, dental, and mental health services to more than 40,000 patients.

At Casey, that expansion is on full display. The center, which is right next to the Inova Hospital campus off of Seminary Road, includes an in-house pharmacy and lab, on-site mental health clinicians, and space for staff from the Alexandria Health Department to help people with their benefits. A baby crying in an exam room reminds Khan to talk about the center’s efforts to provide some limited ultrasound services for pregnant patients and their ability to offer joint appointments for mothers and newborns.

“We’re able to have mother-baby visits after delivery where we see both a postpartum visit in addition to a newborn visit,” he says. “Oftentimes those visits are really late, right? But with increasing maternal mortality and morbidity, you want to try to get them in as early as possible.”

The goal of all of it, Khan says, is to make it as easy as possible for patients to get the health services they need. But now he’s worried Neighborhood Health may be forced to pull back on the array of services they offer — and perhaps even close locations. The organization’s largest single source of revenue is payments from Medicaid, the federal program that insures low-income people. The reconciliation bill passed by congressional Republicans in July is set to pull federal funds back from Medicaid and make changes to the Affordable Care Act.

“We’ve been growing the safety net to be able to provide many aspects of health care to our population that really needs it. And we’ve had support at the policy level, because we’ve moved things in the right direction over time,” Khan said. “That’s my fear right now, that for the first time in a substantial way, that support is going to recede.”

What exactly the new law will mean for Virginia is still coming into focus for state lawmakers and healthcare providers like Khan. Some early estimates suggest that hundreds of thousands of Virginians could lose their health insurance as a result.

But Virginia Republicans, including Gov. Glenn Youngkin, foresee a less dire scenario, pointing to the law’s large infusion of cash for rural healthcare as an opportunity for the commonwealth.

Virginia-specific impacts

A key part of Neighborhood Health’s expansion was Virginia’s 2019 decision to expand Medicaid under the Affordable Care Act. For the first time, that made it possible for non-elderly adult patients without children to access Medicaid coverage. Currently, nearly 700,000 Virginians have health insurance as a result of the expansion.

Many of the reconciliation bill’s biggest changes will affect that group of people. The bill institutes work requirements for adults with children over 14, asking them to work, volunteer, or go to school 80 hours per month. They’ll be required to prove they did so to the state in order to access benefits.

The bill cuts back on “provider taxes,” which states levy on hospitals and nursing homes – money which they then use to increase federal matching funds for Medicaid, a tactic that helps reimburse providers. It also limits so-called “state directed payments,” eventually pushing the reimbursement rates of Medicaid patient care down to base Medicare rates instead of matching private insurance levels. That change could result in a $26 billion reduction in funding for health providers in Virginia, according to one estimate.

Those three major changes will land especially hard in Virginia, some experts believe. Modeling from KFF, an independent health research group, suggests that Virginia could lose just over a fifth of the Medicaid funding it currently receives from the federal government over the next ten years — one of the steepest reductions faced by any state in the country.

“In all of the different ways that the bill singles out different types of states — there’s three different big buckets, and Virginia meets all three of those,” said Alice Burns, associate director at KFF’s program for Medicaid and the Uninsured. She added that about half of the bill’s cuts target the expansion population.

Burns KFF model found that changes to Medicaid, the ACA, and expiring ACA tax credits would translate to about 350,000 people in Virginia no longer being insured.

Changes to Medicaid will roll out gradually over the next several years, with work requirements set to take effect in 2027.

But other changes will come more quickly. Congress did not extend the so-called “enhanced premium tax credits,” subsidies passed by the Biden administration to reduce costs for people who pay for health insurance on the Virginia Affordable Care Act marketplace. They will expire at the end of this year. Some state officials say that could lead as many as 100,000 Virginians to drop their health insurance, as costs for premiums rise. (KFF modeling found the change might affect about 40,000 people, Burns said.)

“We are concerned that enrollment decreases will be in line with those increases that we’ve seen in Virginia,” said Kevin Patchett, the director of the Virginia Health Benefits Exchange, at a meeting of the House Emergency committee studying the impact of federal cuts.

Some families could see a doubling of their monthly premiums, depending on their income bracket, Patchett estimated.

If the state were to fund the tax credits itself, that would come with a steep price tag: about $250 million annually, according to committee staff. Lawmakers would have to act in the next month to prevent price hikes for patients starting in January, Patchett said.

Dr. Basim Khan. Tyrone Turner / WAMU

Khan said Neighborhood Health and other social safety net providers in Virginia were already facing a difficult landscape, with the end of COVID-era federal and state support, healthcare staffing shortages, and rising costs. Now, he wonders how they will keep up with a possible influx of uninsured patients, even as the organization loses the Medicaid funding that enabled it to serve uninsured people to begin with.

“It’s something that keeps me up at night, trying to figure out how we as a community here in Northern Virginia are going to take care of all of these patients,” he said.

Debate over work requirements

Youngkin has defended the changes to Medicaid as a necessary right-sizing for the program and a return to its original focus on families with small children, disabled people, and elderly adults in long-term care facilities. He told the General Assembly’s Joint Money Committees, to whom he will submit his final state budget later this year, that he supports the work requirements.

“I believe this is fair. It will ensure we strengthen and protect the program for the people it was designed for, but it also opens up an avenue to dignity, to get a job, to go to school, or to volunteer in our communities,” he said at a meeting in mid-August.

Youngkin took issue with language and estimates suggesting Virginians will lose coverage as a result of the changes to Medicaid.

“I do want to be clear, changes to Medicaid are not taking coverage away from anyone,” he said. “I want to say that again: Not a single Virginian is losing access to Medicaid or getting kicked off the program.”

Research from the Urban Institute suggests that about 70% of Medicaid expansion recipients nationwide are already working or going to school.

Youngkin and other Virginia Republicans have pointed to a 2018 analysis from the Joint Audit and Legislative Review Commission which looked at the possible impact of instituting work requirements in Virginia, as proposed in a bill introduced by then-Del. Jason Miyares, the current Virginia Attorney General. That analysis found that about 7% of Medicaid enrollees would be deterred from signing up or maintaining their Medicaid eligibility as a result, though the study was based on projections for the Medicaid expansion population, since it came before the commonwealth expanded Medicaid. Another analysis of Miyares’ bill differed from that estimate, finding instead that somewhere between 10% and 22% of recipients would drop off of the program, depending on how difficult providing the state with evidence of hours worked would be.

Youngkin has also touted a fund in the reconciliation bill designed to shore up rural health providers, which often serve many patients on Medicaid. That will provide Virginia’s rural hospitals between $500 million and $1 billion dollars in the next five years. Youngkin issued an executive order to direct state agencies to get Virginia ready to compete for federal money for rural health systems in early August, and Roberts said the department will begin having conversations with stakeholders in rural parts of the commonwealth.

Choices for state policymakers ahead

Federal guidance is still forthcoming, but Virginia officials think they will likely have some latitude in how they choose to implement the new federal law. Their choices on things like how to define what qualifies as work for the new work requirements, how to verify applicants’ incomes, and what state and local governments can do in the way of outreach to help people navigate the new system could help ease some of the impact.

There will be “big decisions we’ll have to make on policy decisions, asset verification process, and obviously outreach,” Virginia Department of Medicaid Services director Cheryl Roberts told the House Emergency committee.

Roberts said the state may also be able to make its own decisions about granting short-term exemptions to the work requirements for people who are hospitalized or in crisis.

“Those are things that we would work together on as Virginians,” Roberts said. “We decide on what that list looks like.”

Roberts noted that the new law restricts some of Virginia’s decisions about how to operate Medicaid, too. The state currently reimburses newly-qualified recipients for medical care going back 90 days, but that will soon be limited to one month for the expansion population and two months for everyone else. It will also require state and local governments to perform eligibility checks for recipients twice a year, instead of annually.

Khan called on state leaders to approach implementation with an eye to ensuring ease of access for patients.

“I’ve seen how paperwork and red tape can lead to people not following through, not getting coverage when they desperately need it, and then ultimately lead to poor health outcomes down the road because they weren’t able to see a doctor or get a medicine,” he said. “What I’d urge people at the state level to do is to keep that in mind as you design your work requirements to really ensure that people do not unnecessarily lose coverage.”

This story has been updated with revised analysis from KFF.

https://wamu.org/story/25/08/20/va-medicaid-affordable-care-act-health-care-changes/

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Alternative Headline: VA Faces $26B Medicaid Loss

[MM Curator Summary]: Virginia may lose $26 billion in hospital funding under Medicaid changes from Trump’s new law, threatening jobs and care access.

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Virginia hospitals will lose out on $26 billion over 14 years under changes to the Medicaid program in President Donald Trump’s tax and spending law, according to new state estimates.

The new federal law — legislation once known as the “One Big Beautiful Bill” that Trump signed on July 4 — is expected to slash federal funding for Medicaid, the government-backed program providing health care coverage for eligible low-income adults, families, children, pregnant people and people with disabilities.

It will bring new requirements for Medicaid members and restrictions on taxes levied on hospitals. The nonpartisan Congressional Budget Office estimates it will lead to 10 million fewer people with health insurance in 2034.

In Medicaid expansion states like Virginia, the law also calls for Medicaid managed care organizations to reduce payments to health care providers by 10% each year starting in 2028 until it’s 100% of the Medicare rate.

This change to state-directed payments is estimated to cause a $26 billion reduction over 14 years because MCOs in Virginia pay providers well over the Medicare rate, according to Chris Gordon, the chief financial officer of Virginia’s Department of Medical Assistance Services.

Gordon told lawmakers last week that modeling shows such a loss in funding would have significant ramifications for the state’s economy.

The cuts will create “a macroeconomic financial shock, not just to the hospitals, but also for the state writ large,” Gordon told the General Assembly’s Joint Subcommittee for Health and Human Resources Oversight in a presentation on July 15.

Gordon added: "There will be a reduction in labor force participation — because the quickest thing to do is reduce head counts when you’re faced with something like that — as well as population, as people move to try and migrate out to do jobs elsewhere.”

A spokesperson for Gov. Glenn Youngkin called Gordon’s remarks into question, writing in a statement last week that the “comments were not based on an official DMAS analysis.”

“Any economic impacts should be evaluated by individuals with specific expertise in hospital finance,” Youngkin spokesperson Peter Finocchio added.

Scott Elmquist

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VPM News File

Former Secretary of Education Aimee Guidera (far left), Gov. Glenn Youngkin and Secretary of Finance Stephen Cummings (far right) watch as Secretary of Health and Human Resources John Littel speaks on April 8, 2024 in Richmond. 

DMAS provided a similarly worded statement Tuesday: “These speculative comments were not based on an official DMAS analysis. Any economic impacts should be evaluated by individuals with specific expertise in hospital finance and economics.”

The department did not respond to questions on who in Youngkin’s administration approved the presentation and if the department stands by the estimates. It also did not provide the modeling Gordon referenced.

Finocchio did not respond to follow up questions on if Youngkin has been briefed on the DMAS estimate and whether the governor has concerns over the potential reduction and reports showing Virginians will lose their coverage. Instead, he touted new requirements that able-bodied Medicaid recipients engage in 80 hours a month of work, community service, education or a combination thereof.

“Medicaid was originally formed as a safety net for people who otherwise couldn’t go to work, but today there are an estimated 40,000 to 50,000 able-bodied people currently not going to work who should,” Finocchio said in a Monday statement. “The Medicaid reforms in the One Big Beautiful Bill will provide accountability for those abusing the system while ensuring that individuals who are truly disabled, have dependents, or are elderly still have access to the benefits they rely on. That’s something the vast majority of Americans and Virginians fully support.”

Finocchio cited a 2018 state study from the nonpartisan Joint Legislative Audit and Review Commission that estimated 7% of the Medicaid expansion population would be “deterred from enrolling or leave the Medicaid program” due to proposed work requirements when Virginia expanded coverage to eligible low-income adults.

An Urban Institute study from June found 69% of Medicaid expansion enrollees do work or go to school, with only 2% reporting a lack of interest in a job as their reason for not working.

Critics of such requirements have pointed to estimates and reports finding they don’t lead to an increase in employment, arguing they instead create barriers that will increase the number of uninsured people.

Gordon, who as DMAS CFO has overseen Virginia Medicaid’s financial operations since February 2019, and other state officials outlined the potential effects of the new law to the subcommittee.

The new law calls for phased-in reductions to the provider taxes that covers Virginia’s share of Medicaid expansion costs and draws down federal dollars for Medicaid supplemental payments.

For Virginia’s Medicaid expansion population, the federal government covers 90% of the annual costs. The state pays the rest through a 6% coverage assessment tax it levies on patient revenue at 63 private acute care hospitals.

The new federal law requires Virginia to lower that tax by half a percentage point each year starting in October 2027 until it hits 3.5% in 2032. (That timeline is based on federal fiscal years, which run from Oct. 1 to Sept. 30; Virginia’s fiscal year runs from July 1 to June 30.)

The private provider tax generates $1 billion a year that the state combines with federal dollars to make supplemental Medicaid payments to hospitals in an attempt to close the reimbursement gap. (Medicaid agencies already pay providers less than the cost of the services they provide.)

With the law capping state-directed payments at the Medicare reimbursement rate, private acute care hospitals in Virginia are estimated to see a $24.8 billion funding reduction over 14 years, and the VCU Health System and UVA Medical Center will lose out on $1.2 billion, according to the DMAS presentation.

Analysts and health system leaders have warned of the possible ripple effects of the law’s impact on Medicaid, including potential hospital closures, health care service reductions and job losses.

Democrats on the subcommittee raised concerns about hospitals and health care facilities being able to operate and the risk of closures without the funding.

State Sen. Adam Ebbin (D–Alexandria) asked Gordon to clarify whether it was a federal government directive or if the state was getting less federal money.

“The federal government is directing us to tax the hospitals less and to reduce the amount we’re paying them above Medicare. So, it’s both,” Gordon said.

“So, in spite of inflation or medical inflation, they expect these private acute hospitals to provide the same level of care with $26 billion less, while cost would go up normally?” Ebbin asked.

“Yes,” Gordon responded.

Shaban Athuman

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VPM News

Sen. Adam Ebbin, D-Alexandria, Chas with Sen. Schuyler VanValkenburg, D-Henrico, and Sen. Creigh Deeds, D-Charlottesville, during a recess in a General Assembly session on Wednesday, February 12, 2025 at the Virginia State Capitol in Richmond, Virginia. 

Julian Walker, vice president of communications with the Virginia Hospital and Healthcare Association, said VHHA estimates show the law’s Medicaid provisions will cost Virginia hospitals $2 billion a year.

State-directed payments account for 16% of net revenue for hospitals, Walker told VPM News, and it’s more than 20% for some that serve higher shares of Medicaid patients.

“It is difficult to imagine a scenario in which any organization, whether a hospital or something outside of health care, because of a policy decision, eventually loses 15, 20, 25, 30% of revenue, and that organization continues to function and exist in the same fashion it did prior to absorbing that very significant financial hit.”

One major focus has been the potential impact on rural hospitals, which already face financial struggles and are at risk of joining others that have shut down.

If the funding cuts happen, Walker said they will make an “already very challenging situation” for rural facilities worse. He noted that rural hospitals serve a higher share of patients covered by Medicaid and Medicare, and struggle with recruiting and retaining staff.

A June analysis by the Center for Healthcare Quality and Payment Reform found seven rural hospitals in Virginia are at immediate risk of closing, including Southern Virginia Regional Medical Center in Emporia and VCU Health Community Memorial Hospital in South Hill.

In a June 12 letter, US Senate Minority Leader Chuck Schumer (D–N.Y.) and other Democrats raised concerns on the bill’s impact on rural hospitals to Trump and Republican congressional leaders.

The letter states that six rural hospitals in Virginia are at risk of closing, citing information provided by the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.

Since at least last week, webpages for the North Carolina Rural Health Research Program at the Sheps Center, which gets federal funding, have been under review; some information is still offline. The Sheps Center did not respond to messages seeking comment.

The law includes a rural health transformation program grant that will offer $100 million in funding that Virginia can apply for, with additional future competitive grants for states. The $50 billion fund is roughly a third of the estimated federal Medicaid funding loss in rural areas, per The Kaiser Family Foundation.

Before Trump signed the bill July 4, state Democrats raised concerns over congressional reports estimating that nearly 323,000 Virginians could lose their health insurance. Republicans have claimed that figure is too high, with Youngkin telling reporters last week that the number was “literally made up.”

“For weeks, Youngkin has dismissed warnings from Democrats as exaggerated and ‘made up.’ But now, with these sobering estimates coming from his own administration, denial is no longer an option,” David Toscano, an attorney who was previously a Democratic state delegate and mayor of Charlottesville, wrote in an op-ed in the Richmond Times-Dispatch. “The damage may not be immediate, but it will be deep.”

In June, before the Senate made changes to the bill, a Commonwealth Fund analysis projected that 13,200 health care jobs — and 26,100 total jobs — in Virginia would be lost due to the Medicaid provisions.

US Rep. Rob Wittman (R–1st) voted to pass the legislation, despite previously signing a letter with other GOP lawmakers saying they wouldn’t back a final bill that reduces “Medicaid coverage for vulnerable populations.” A spokesperson for Wittman did not respond to a request for comment prior to publication.

Another concern Walker raised is the potential strain on emergency departments. Virginians who lose coverage could delay care and rely mostly on emergency departments, he said, creating a higher demand for beds.

Lawmakers on the oversight subcommittee agreed to next meet on Sept. 10 because they could be in Richmond then for a special session to respond to federal cut impacts.

DMAS Director Cheryl Roberts is set to give an update on federal Medicaid money to the Joint Commission on Health Care on Wednesday. On Tuesday, Roberts told lawmakers that the true impact of the bill is still unclear as the state awaits federal guidance on work requirements and other provisions.

https://www.vpm.org/news/2025-07-22/va-medicaid-cuts-trump-dmas-gordon-youngkin-ebbin-vhha-walker-wittman

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