Trump's Medicaid cuts threaten Virginia's hospitals and free clinics
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Virginia hospitals and Richmond-area free clinics are warning that the Medicaid cuts in President Trump's tax and spending bill could reduce access to care and potentially force closures.
Why it matters: The changes threaten to trigger a domino effect across Virginia's health care system, local operators tell Axios — increasing costs, wait times and the risk of staff layoffs as hundreds of thousands lose coverage.
- "I'm not sure how folks are supposed to survive during all of this," says Karen Legato, head of Richmond free clinic Health Brigade. "Especially if you're working in the safety net where the needs are already overwhelming."
The big picture: The bill, which Trump signed Friday, has three main Medicaid shifts making medical providers nervous:
- Providers say adding work requirements for some recipients and conducting eligibility checks twice a year (instead of once) could lead to accidental coverage losses, starting Dec. 31, 2026.
- Plus: Hospitals face cuts to Medicaid payments they rely on for funding (beginning 2028).
State of play: The phase-down of the Medicaid payments could cost Virginia hospitals over $2 billion annually, says Virginia Hospital & Healthcare Association spokesperson Julian Walker.
- The "potentially devastating" impact could be most aggressive for the state's rural hospitals, where those payments account for up to a third of their revenue, Walker tells Axios.
Zoom in: Nearly a quarter of Virginia's rural hospitals (7) were already at immediate risk of closing in June, per the Center for Healthcare Quality and Payment Reform.
- If hospitals close or scale back services, Walker says that can mean job losses or longer commutes for health care.
Then there's the spillover effect for already overwhelmed free clinics, as over 300,000 Virginians are projected to lose coverage.
- The spike in demand will likely happen as they face drops in revenue from losing Medicaid patients, says Julie Bilodeau, CEO of CrossOver Healthcare Ministry, a free clinic in South Richmond serving refugees, students, contract workers and more.
Case in point: CrossOver relies on Medicaid payments for at least 20% of its budget next year, per Bilodeau.
- It's about 8% at Health Brigade in the Museum District, but the loss would be coupled with over $1.8 million in separate funding cuts in the last year, executive director Karen Legato tells Axios.
- The $1.8 million alone was nearly half their budget.
Threat level: Less money to cover costs can mean reducing capacity, and if free clinics can't see patients, Bilodeau says she fears people will either:
- Flood emergency rooms
- Or forgo care until it's a health crisis.
What we're watching: Free clinics are increasingly turning to private philanthropy to fill the gaps, "but philanthropy is not designed to pay for health care," Legato says.
The bottom line: "As people lose their Medicaid, we're going to be back to expecting free clinics to step up," she says, "and we don't have the capacity to step up."
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