Shutdown and Medicaid cuts deal one-two punch to Virginia hospitals
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Virginia is facing a Medicaid double squeeze: long-term cuts from the GOP overhaul and short-term funding uncertainty from the federal shutdown.
The big picture: While Medicaid coverage remains intact, safety-net hospitals nationwide could lose billions in payments that help cover care for uninsured and low-income patients if the shutdown drags on.
- That's because a delay in cutting $8 billion in additional Medicaid payments, as part of the Affordable Care Act, expired when funding lapsed last week.
- Two rural hospital support programs also ended, leaving providers unsure whether — or when — the money would be restored.
State of play: Virginia hospitals and free clinics were already bracing for a Medicaid overhaul, part of President Trump's tax and spending bill, which could strip coverage from nearly 600,000 residents by 2027.
- State hospitals face $2 billion in annual Medicaid cuts once changes go into full effect in October 2027, Virginia Hospital & Healthcare Association spokesperson Julian Walker told Axios.
- Walker noted that the uncertainty is happening as hospitals continue to recover financially from the COVID pandemic.
By the numbers: Nearly a third of Virginia's rural hospitals (9) were at risk of closing in August, per the Center for Healthcare Quality & Payment Reform.
- And last month, Augusta Medical Group announced it had closed three urgent and primary care clinics in southwest Virginia ahead of Medicaid changes.
Between the lines: Closures or cutbacks could mean job losses, longer commutes for care and a strain on free clinics, which have said they lack the resources to absorb the surge of uninsured patients if people lose coverage.
The latest: Now, uncertainty about how long the shutdown will go on is leaving some of the most financially vulnerable hospitals in limbo.
- Hospitals might not feel immediate effects, and the federal Medicaid agency said on its site that it'll have enough funding through the first quarter of next year.
- But state Medicaid agencies could impose cuts if they think lawmakers' standoff will continue indefinitely, per the American Hospital Association.
- The uncertainty "really impacts that predictability and reliability as it relates to funding," Leonard Marquez of the Association of American Medical Colleges tells Axios.
Meanwhile, Virginians shopping for marketplace insurance won't know their premium costs until Oct. 31, the day before open enrollment begins.
- Without an extension of federal subsidies expiring at the end of the year, premiums could jump over 20%, reports the RTD — a squeeze that could push more people into the safety net.
- Democrats have tied extending those subsidies to budget negotiations, a standoff that helped trigger the shutdown when Republicans didn't agree.