Hundreds of thousands of Virginians could lose insurance coverage if Medicaid expansion is rolled back
Denise Smith sat with her legs crossed on a blanket-covered sofa in her Rocky Gap home, reflecting on a life shaped by hard work and financial struggle. The 66-year-old woman has held jobs at factories, restaurants, museums and a pharmaceutical company. She recalled having employer-provided health insurance only three times before transitioning to disability coverage.
Smith frequently avoided seeking health care due to the cost. She remembered when medical debt nearly forced her and her then husband into homelessness. When her son, Josiah, became critically ill, she saw firsthand what can happen when people don’t have access to health care.
With President Donald Trump returning to the White House, and Republican majorities in both houses of Congress, conversations have begun in Washington about cutting Medicaid funding. Such cuts could trigger a state law that would reverse Virginia’s 2019 expansion of the insurance program if federal funding drops by even 1%, leaving hundreds of thousands of Virginians without health insurance.
Many rural hospitals depend heavily on Medicaid expansion patients to stay financially viable. Without this funding, these hospitals could face financial strain, risking the services they provide to underserved communities.
Efforts are underway in Richmond to safeguard expansion. A budget amendment introduced by Sen. Creigh Deeds, D-Charlottesville, and another by Sen. Ghazala Hashmi, D-Chesterfield County, seek to remove the trigger law and establish a committee to explore alternative funding options for Medicaid expansion.
For Virginians like the Smiths, Medicaid expansion has been a lifeline.
Josiah Smith was 32 years old when he woke up one morning in 2014 with painfully swollen knees.
He had worked since he was 16, but he never had a job that offered health insurance. And this was before Virginia had expanded Medicaid to include low-income adults like him.
Unable to walk and rapidly losing weight, he went to a clinic near his Bland County home. He paid out of pocket for antibiotics, but the symptoms kept getting worse.
His mother sought out low-income clinics and applied for charity programs. It took months to get testing done as she tried to figure out how to pay for the care and the doctors her son needed.
He eventually was diagnosed with ankylosing spondylitis, an autoimmune disease that causes inflammation in the joints and at the base of the spine. Without treatment, it can lead to organ damage and vision problems.
That’s exactly what happened to Josiah. His family could only afford to buy the cheapest medications, and none of them worked. He lost sight in his right eye, and when he walks, his steps are slow and measured.
His disease progressed. In 2015, he was approved for disability benefits, which included access to Medicaid. He found a monthly infusion that kept the swelling down, accessible to him only through Medicaid.
“We have lived without Medicaid, so I can tell you what happens to people when they don’t have access to health care,” his mother said. It angers her, she says, because “they tell me that if they had caught it early enough it wouldn’t be this advanced.”
Hundreds of thousands of Virginians could lose coverage if Medicaid expansion is rescinded
In the western half of the state, more than 178,000 Virginians have received health care coverage under Medicaid expansion since the commonwealth implemented the program in 2019, according to data from the Virginia Department of Medical Assistance Services. Statewide, the number totals more than 630,000.
In all states, a person can qualify for Medicaid if they meet criteria based on income, household size, disability, family status and other factors, though eligibility rules can differ between states, according to Healthcare.gov. In states that have adopted Medicaid expansion, a person can qualify for Medicaid if their income is below 138% of the federal poverty level.
Deeds expressed concern about the possibility that the 119th Congress could rescind Medicaid expansion.
“We’re going to be way up a creek without a paddle if that happens,” he said.
Since the November election, Congressional Republican leaders have been increasingly open about their intent to make cuts to Medicaid, according to a health policy blog post by the Georgetown University McCourt School of Public Policy.
U.S. Senate Republicans also attempted to dismantle the Affordable Care Act in 2017, under Trump’s first term, but they failed when Sen. John McCain, R-Arizona, voted against the effort for a 51-49 majority in opposition of the effort. This year, with Trump back in the White House and a Republican majority in both the U.S. Senate and House of Representatives, Congress appears poised to try again.
Trump has already signaled his willingness to sign a bill that could end Medicaid expansion. In an executive order signed on his first day back in office, he rescinded an order by the Biden administration aimed at strengthening the Affordable Care Act and Medicaid.
Expansion of the Medicaid program was introduced in the Affordable Care Act, passed by Congress and signed by former President Barack Obama in 2010. Since then, Medicaid expansion has been adopted on a state-by-state basis. As of November, 41 states had adopted it.
Del. Terry Kilgore, R-Scott County, was one of a number of General Assembly Republicans who broke from the party to vote in favor of expanding Medicaid in Virginia in 2018. In the end, 36 House Republicans and four Senate Republicans voted for the 2018 biennial budget that established Medicaid expansion in Virginia.
“In Southwest Virginia, we had hospitals closing and folks who didn’t have health care opportunities having to drive two and three hours. People were actually dying because hospitals were closing,” Kilgore said.
Kilgore saw expansion as a way to close a gap in services in his district and to support the health care needs of his constituents.
“It was a tough time [to support expansion], and tough within the caucus, but other states were doing it — other Republican-led states were doing it and they were seeing great results from it. At the end of the day I thought it was best for a few of us to move forward with Medicaid expansion,” he said.
A domino effect that may cause hospitals to shutter
Hospitals, particularly those in rural areas, rely heavily on revenue from patients covered under Medicaid expansion.
“Leading up to expansion, hospitals were mostly cutting back on services,” said Deepak Madala, director of Virginia’s insurance marketplace called ENROLL Virginia.
About 39% of the patients who stay at Russell County Hospital in Lebanon for 24 consecutive hours or more are covered by Medicaid, according to data from Virginia Health Information.
At Twin County Regional Hospital in Galax, the number is 33%. At Carilion Roanoke Memorial Hospital, 26.4%.
The federal government currently covers 90% of Medicaid’s operating costs, with Virginia covering the remaining 10%. A portion of Virginia’s share comes from a tax on hospitals.
Deeds noted that if expansion coverage is rolled back, it could result in the closure of smaller hospitals across the state.
The Virginia Poverty Law Center, a nonprofit organization that advocates for low-income residents, has raised similar concerns.
If federal funding for Medicaid were reduced, hospitals might need to shoulder a larger share of the program’s costs, said Emily Hardy, deputy director of the Center for Healthy Communities at the Virginia Poverty Law Center.
But Deeds noted that the state is not financially prepared to pick up the 90% share currently paid by the federal government for the program.
“Hospitals couldn’t afford to pick up the 90% that the feds are paying right now any more than Virginia could,” Deeds said. “Where’s that money going to come from?”
The federal government paid about $6.2 billion in fiscal year 2023 to fund Medicaid expansion in Virginia. The state was responsible for about $693 million in the same time frame.
Before Medicaid expansion, Virginia had one of the highest uninsured rates in the country. In the year prior to expansion, about 27.6% of residents under 65 years old lacked health insurance. That’s about 5 percentage points above the national average, according to data from the National Institutes of Health.
Many individuals could lose health insurance if Medicaid funding is reduced, and not all of those people would get coverage other ways, Madala said.
When parents are enrolled in health insurance, their children are more likely to be covered as well. But if parents lose coverage, the whole family often loses it, Madala said.
Funding cuts could also jeopardize Medicaid waiver programs, which are often the first to face reductions, Madala said.
Medicaid waivers provide coverage for services not typically included in standard Medicaid, such as long-term care and support for individuals with disabilities or chronic illnesses. These programs are already limited, with few providers available, and potential funding cuts could make access even more difficult.
Virginia is already experiencing a shortfall in funding for Medicaid
A presentation by staff of the Virginia Senate Finance and Appropriations Committee to members during a November retreat outlined a shortfall of hundreds of millions of dollars in the state’s current Medicaid funding forecast. Three primary drivers in the increase in cost to fund Medicaid include a rate of enrollment that is 30% higher than pre-pandemic numbers, an increase in care costs and an increase in services.
Gov. Glenn Youngkin said during a presentation to the joint House and Senate money committee in December that he plans to meet the state’s current shortfall to fund Medicaid through a budget amendment request of over $687 million.
When asked repeatedly by reporters about his plan in January, should Congress roll back Medicaid expansion, Youngkin declined to answer and said the question was based on supposition.
Instead, Youngkin said that his job is to fully fund the state’s current Medicaid responsibilities. He noted that there has been a “rapid increase” in Medicaid costs in Virginia.
Deeds pointed out that there would be recurring funding needs. Even if the state put all of its current budget surplus — forecast to be roughly $4.7 billion — toward fully funding Medicaid expansion, that money would need to be paid again the following year.
Kilgore recalled the 2018 vote when the General Assembly adopted Medicaid expansion with the trigger language caveat that would roll back expansion in Virginia should the federal cost share ever dip below 90%. That language was included as a negotiation tactic to get the votes necessary to adopt the program’s expansion, he said.
It won over enough Republicans to get the bill passed, but many remained steadfast in their opposition.
“I voted against it,” said Sen. Mark Peake, R-Lynchburg. “You’re seeing why, now.”
Peake said he has not seen a government program that hasn’t expanded “exponentially” beyond what the legislative body discussed at the time of passage. He said he was also concerned, in 2018, about the possibility of Medicaid expansion being rolled back by Congress after it was adopted at the state level.
“You do not want to count on the federal government keeping up with commitments that it made to us on spending. It’s never guaranteed,” he said.
Peake said he is sympathetic to people who do not have access to health care, but he said he believes going through the private sector is better than relying on a program that now finds itself in a precarious position.
What legislators are doing
Deeds introduced a budget amendment this year that would remove the trigger language from state law. Under the amendment, should the federal match rate change, a legislative committee would be established to consider ways to adjust to the federal action while preserving access to health coverage for as many Medicaid enrollees as possible.
“At this point, to a large extent, it is supposition. It is just speculation in terms of what’s going to happen in Congress, what’s going to happen in Washington,” he said. “I worry about it a lot — I guess you can’t worry about what you can’t control; you just have to be prepared for whatever’s going to happen.”
Representatives Morgan Griffith, R-Salem; Ben Cline, R-Botetourt County; and John McGuire, R-Goochland County, did not respond when asked about whether Congress would attempt to roll back Medicaid expansion.
Sen. Tim Kaine, D-Va., said he plans to strongly oppose any proposal to cut Medicaid funding. He, and his Democratic counterparts in Congress, are in the minority for at least the next two years.
Kilgore said he isn’t concerned about expansion being rescinded under the 119th Congress.
“It’s a way that we provide health care services to those in need. I think it’s going to continue,” he said. “I don’t see much appetite for that in folks I’ve talked to.”
Kilgore also said he would have to see a fiscal impact study on how Deeds’ budget amendment to do away with trigger language in the 2018 biennial budget could affect the state budget before he was able to support it.
A collage of pictures rests on the mantel behind the wood-burning stove in Denise Smith’s home. A bearded man with a banjo under his arm is pictured; his name was Eddie Atwell.
“He was my fella,” Smith said. The couple spent 20 years together, but Atwell died last year at the age of 70.
Years earlier, Atwell had suffered a heart attack but avoided going to the doctor because he didn’t have health insurance. When he experienced a second heart attack, he finally had insurance, but it was too late. Doctors told him they couldn’t repair his heart due to the damage caused by the first heart attack. He died shortly after, Smith said.
“[Health care] isn’t something you can choose to live without,” Smith said. “You can choose to live without a car. You can ride a bicycle, you can walk, you can take the bus. It’s not going to kill you not having it. But not having health care can kill you.”
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