Choosing Care Over Corporate Tax Cuts: A Better Path for Virginia’s Budget

As we envision the Virginia we want to live and grow in, access to affordable health coverage and services is often top of mind. Unfortunately, Governor Youngkin’s final budget proposal includes questionable decisions that put the health and well-being of Virginia families in danger and warrant strong reconsideration by the General Assembly and Governor Spanberger.

Gov. Youngkin’s budget includes over $465 million in tax breaks mirroring federal tax breaks for large businesses, corporations, and wealthy individuals, while cutting funding for health coverage for pregnant individuals and limiting access to critical services such as dental care. The introduced budget also ignores the need to prepare for upcoming SNAP food assistance costs being shifted to states and lacks any response to federal lawmakers’ failure to extend enhanced Affordable Care Act subsidies under the federal H.R. 1 bill. 

State lawmakers should take several practical steps to protect our resources and invest in the well-being of our communities.

Invest in a Healthy Start: FAMIS Prenatal Program ($29.5 million)

Access to affordable, comprehensive health care is vital at any stage of life. But for anyone who can or will experience pregnancy, access to prenatal care can impact the health and well-being of both the parent and the child. Since July 2021, Virginia has offered prenatal coverage through the FAMIS (Family Access to Medical Insurance Security) Prenatal program to pregnant individuals who are not eligible for other public coverage options due to immigration status but meet all other eligibility requirements. The program provides comprehensive prenatal, delivery, and 60 days of postpartum coverage.

While data on annual enrollment in the program is not currently available, over 4,000 people accessed health coverage through FAMIS Prenatal at any given time in 2025. The federal government generously matches this program, contributing roughly $1.88 for every $1 the state spends on this coverage.

Unfortunately, the introduced budget cuts all funding for FAMIS Prenatal and instructs our Medicaid agency to withdraw from the program. Without this program, people who benefit from FAMIS Prenatal would be limited to Emergency Medicaid coverage, which only covers labor and delivery — leaving families with no coverage in the months leading up to and in the days recovering from delivery. This lack of early care increases the risk of overlooking serious and life-threatening health conditions for both the parent and baby. 

Recent changes in the federal H.R. 1 bill would also mean giving up critical resources if Virginia withdraws from FAMIS Prenatal. The federal government will soon contribute just $1 for every $1 the state spends for Emergency Medicaid services (for the current budget year), compared to $1.88 for FAMIS Prenatal. Ending FAMIS prenatal not only leaves money on the table, it also leaves families at great risk.

We strongly urge the legislature to restore full funding and language for this program.

Protect Access to Providers: Medicaid Reimbursement Rate Adjustment ($238.2 million)

While health coverage is important for accessing health care, being able to see a nearby provider in a timely fashion is a vital component of meeting your health care needs. People who get coverage through Medicaid deserve a range of provider options that fit their preferences, transportation needs, language preferences, and more. 

Governor Youngkin’s introduced budget pauses adjustments that would help Medicaid provider reimbursement rates keep pace with rising costs for the upcoming two budget years. The reduced rates could lead to fewer providers accepting or seeing patients who have Medicaid, making it harder for families to find, book, and get to appointments for care. We urge lawmakers to consider adequate Medicaid reimbursement rates to promote a robust provider network for the over 1.8 million people across Virginia who rely on Medicaid/CHIP coverage.

Support Overall Health: Reject Adult Dental Benefits $2,000 Spending Cap ($23.6 million)

Good oral health is a key component of overall health and can help prevent serious health conditions. During the 2021 legislative session, the Virginia General Assembly chose to expand access to comprehensive dental benefits to adult members with Medicaid coverage, with coverage beginning on July 1, 2021. This benefit covers up to three regular cleanings annually as well as preventive care, X-rays, fillings, dentures, oral surgeries, and other oral health services.

Prior to this decision, adults with Medicaid coverage may have never had access to comprehensive dental health coverage, leading to painful, costly, and avoidable issues. For example, over half of the 19,000 ER visits for dental concerns by people enrolled in Medicaid in 2018 were for “non-traumatic dental conditions” like toothaches and loose teeth. Governor Youngkin’s outgoing proposal would implement a spending cap on dental services, which could lead to missed opportunities to provide needed services to improve oral health outcomes for adults across Virginia. Lawmakers should reject this change and make sure people in Virginia can access the comprehensive care they need.

Protect Access to Food Assistance through SNAP

The federal H.R. 1 bill includes several provisions that impact access to food assistance through SNAP, including newly excluding some immigrant groups and adding red tape through expanded work reporting requirements. The bill also shifts some federal costs to the states. Previously, the federal government and states equally split administrative costs for SNAP, but H.R. 1 shifted more costs to states, making them responsible for 75% of the costs. This is expected to cost Virginia an additional $100.4 million, and the introduced budget includes funding to cover this new cost.

The federal government is also shifting SNAP program costs to states and may impose penalties if states fail to meet certain requirements related to how often benefits are calculated incorrectly (error rates). For nearly 50 years, Congress has always funded the full cost of SNAP benefits. Depending on how high a state’s error rate is, Virginia would be expected to contribute anywhere between 0% to 15% of program costs. Based on Virginia’s most recent error rate, the state could be expected to contribute $211 million in the upcoming budget. Unfortunately, Gov. Youngkin’s introduced budget fails to provide any funding for these potential new costs. While efforts are underway and new funding is included in Gov. Youngkin’s proposed budget to try to decrease the state’s SNAP error rate, it would be prudent to set aside funds to ensure food assistance to Virginia families is not further impacted.

Address Expired Enhanced ACA Premium Subsidies

Enhanced ACA premium tax credits (PTCs) provided more generous help to families purchasing coverage on the marketplace, including families earning above 400% of the federal poverty limit (FPL) — $132,000 for a family of four — until they expired at the end of 2025. While the U.S. House recently passed and the U.S. Senate is still considering proposals to extend enhanced PTCs, many families and individuals have already had to make hard decisions about continuing ACA coverage due to higher premiums. The Virginia Health Benefit Exchange estimates that roughly 100,000 people in Virginia may leave the marketplace this year due to losing access to enhanced assistance and being priced out of coverage.

Several states have moved forward with programs and funding that provide targeted state-level subsidies to all or some of their residents to maintain access and affordability of ACA health plans. Governor Youngkin’s introduced budget does not include any funding to offset the expiration of enhanced ACA subsidies. We encourage the General Assembly to look to states like Maryland, which adopted a single-year state premium assistance program that fully replaces the expired enhanced federal subsidy for people at or below 200% of the federal poverty level (FPL) — $60,000 for a family of four —  and replaces half of the expired enhanced federal subsidy for those with incomes between 201% and 400% FPL.

An Opportunity To Fix What’s Wrong

Governor Youngkin’s introduced budget prioritizes tax cuts for corporations and wealthy individuals, paid for, at least in part, by cutting health care for people in every corner of the state. Restoring health coverage for pregnant individuals and access to critical services such as dental care should be a top priority for state lawmakers. Lawmakers should reject Gov. Youngkin’s harmful tax decisions and raise new, sustainable revenues to maintain access to critical health care programs and services, fund state-level ACA subsidies, and prepare for future SNAP costs.

Category:
Health Care