Virginia’s Health Budget Responds to Federal Harm, Work Remains to Expand Access to Care

Health care should be accessible and affordable for everyone in Virginia, regardless of their income or immigration status. In 2023, a record 93.6% of people in Virginia had health insurance. More people could see a doctor, go to the hospital, and afford the care they needed. This historic accomplishment was possible in part because Virginia lawmakers chose to expand Medicaid and because federal lawmakers created pandemic-era Medicaid protections and improved tax credits to lower insurance premiums purchased through the Affordable Care Act (ACA) Marketplace. 

Unfortunately, recent federal policy choices are undoing much of the progress Virginia made in connecting people to care. After Congress allowed Medicaid coverage protections to expire, Virginia’s health insurance enrollment began to decline. Then in 2025, Congress made coverage through the ACA Marketplace more expensive by letting the enhanced premium tax credits (EPTCs) expire. As a result, 100,000 people in Virginia have been priced out of their ACA health insurance plans. President Trump’s signature budget bill, H.R. 1, will only make matters worse. TCI estimates that H.R. 1’s new Medicaid restrictions will take away coverage from an additional 260,000 people in Virginia within the next 9 years, starting in 2027. Hospitals have already reported a rise in patients seeking emergency care without insurance, before the worst of the Medicaid changes take effect in 2027. As more people face barriers to coverage, Virginia’s health care safety net, including free clinics and community health centers, will be further strained 

Harmful federal choices put state lawmakers in a difficult position this year. Instead of expanding access to care, much of their work focused on reducing harm caused by H.R. 1 and other recent federal actions. While Virginia state lawmakers cannot fully make up for the health coverage losses and cost shifts caused by federal lawmakers, they approved several investments to help. Many of those investments are thanks to a compromise to create a two-year electricity consumption tax on data centers, which is expected to raise additional revenue but is capped at $1.2 billion. 

Below are highlights of key health care investments made in the budget: 

• H.R.1 requires Virginia to set up new systems to comply with additional paperwork requirements for adults who qualify for Medicaid due to expansion. The changes require people to report work monthly and verify their eligibility twice a year instead of annually. Lawmakers approved $134 million from the hospital provider tax and federal match funds to set up those systems, as well as an additional $3.5 million to support ongoing outreach, education, and workforce support that people will need in order to maintain their Medicaid coverage or SNAP food assistance. 

• Lawmakers also invested $150 million to partially replace the expired EPTCs for plan year 2027. The new, state-level credits will be targeted to people making between 138% and 250% of the federal poverty limit (about $22,025 to $39,900 for an individual or $37,702 to $68,300 for a family of three). State officials estimate the funding will help about 45% of people who were priced out of their health plans this year and save people as much as 70% on their monthly premiums. 

• Lawmakers restored nearly $30 million for prenatal and postpartum care, along with over $47 million, including federal matching funds, by reversing cuts proposed by former Governor Youngkin in his outgoing budget. This funding will continue coverage for certain immigrant communities to access care before, during, and 60 days after giving birth. 

• As Virginia prepares for more people to be priced out of ACA plans or have their Medicaid coverage taken away, lawmakers also approved $10 million for free clinics and $5 million for Federally Qualified Health Centers. These are two critical types of safety net providers that serve people without adequate health insurance, helping them manage health conditions before they become more serious. Without access to primary and preventative care, people may delay treatment until their health condition worsens and requires emergency care. Since these patients are often without insurance and likely unable to pay, these costs shift to the state in the form of uncompensated care. This funding increase is essential to helping Virginia’s front line safety net providers prepare for the influx of patients without insurance while also mitigating additional costs to hospitals and the state. 

• As federal lawmakers consider additional cuts and the Trump administration continues to withhold Congressionally appropriated funds, lawmakers also set aside $350 million in a Medicaid Reserve Fund and $225 million for a Federal Uncertainty Contingency Fund. 

Most of this year’s major health care spending was focused on responding to the devastating impacts of H.R.1 rather than expanding access to care. Without bolder revenue actions, lawmakers did not have the new, ongoing state funds necessary to make the long-term investments our communities need. Health care advocates will continue to fight for stronger health care investments in 2027 so everyone in Virginia can access affordable, quality health care. 

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Health Care