Lost in Paperwork: New Federal Proposals Will Kick Hundreds of Thousands Off Coverage

Everyone deserves access to quality and affordable health care. Yet, pending federal action on the so-called “One Big Beautiful Bill” could put up more barriers to health coverage. The U.S. House of Representatives recently passed a bill that would kick hundreds of thousands of people off of health coverage in Virginia, create new out-of-pocket costs for families already struggling to get by, increase the frequency of submitting paperwork, and ultimately harm all of us who call Virginia home. The proposal includes at least $860 billion in cuts to Medicaid and CHIP spending, which, on their own, result in kicking 7.8 million people off of health coverage. As the bill moves to the Senate and later back to the House, federal lawmakers should reject these rushed proposals and instead work to improve access to quality health care.

Nationally, 92% of adults under 65 who are enrolled in Medicaid work for pay, attend school, care for family members, or have a disability. When people are paid too little to afford health care, Medicaid is a critical program that helps keep people healthy enough to work or care for others. Yet a recent bill passed by the U.S. House of Representatives would require individuals to jump through administrative hoops to prove they are working, attending school, or completing community service a minimum of 80 hours a month to maintain their health coverage. Implementing the House bill would unnecessarily put health coverage at risk for up to 470,000 people in Virginia by requiring new burdensome work reporting requirements, placing a costly burden on the state and decreasing employment rates.

The bill would also pass on costs to people who are already struggling by imposing cost-sharing on individuals and families who access health coverage through Medicaid expansion and earn wages above the federal poverty level. This includes single parents, those dealing with serious illnesses, veterans, and others. While a $35 co-pay in the bill language for some services may seem small to some of the policy’s proponents, each dollar means less money that could be spent on other essentials like rent, food, and more. Over 147,000 people in Virginia would be impacted by this new policy.

Overall, the Medicaid policies included in the House bill are expected to result in approximately 210,000 people in Virginia becoming uninsured, with an additional 46,000 losing access to health coverage because of the ACA provisions in the House bill.

Arkansas is one state that has already attempted to implement work reporting as a condition of Medicaid coverage. Though courts ultimately halted the unlawful program, it’s important to note that the portion that was implemented failed to improve employment outcomes. Evidence from Arkansas also revealed that the program was expensive for the state to manage and ultimately took away health coverage from 18,000 people because of difficulties in submitting paperwork. Work reporting requirements don’t work. Taking away health coverage from people who would otherwise qualify, simply due to increased bureaucracy, and making it harder for them to go to work is counterproductive.

While the bill includes carve-outs for certain groups, paperwork issues will likely lead to the disenrollment of many people who should be exempt. These exemptions cover people under age 19 or over age 64, those too sick to work, caregivers, and others, but these protections do not guarantee that their health coverage will not be taken away. In the Arkansas experience, people who worked or should have qualified for an exemption were kicked off coverage due to paperwork or other administrative issues, known as a “procedural disenrollment,” or lack of knowledge of the requirements. 

The House bill would not only add new paperwork, but it would also increase the frequency of eligibility checks (from once a year to every six months) for people who are eligible due to Medicaid expansion. These increased eligibility checks would also increase administrative or procedural coverage loss. Historically, qualifying individuals have been kicked off coverage simply due to technology literacy and language barriers that make it difficult to keep up with paperwork requirements. For example, when COVID-related Medicaid enrollment protections ended, TCI analysis found that procedural errors had a significant impact. From April 2023 to August 2024, approximately 42% of all child disenrollments from Medicaid were due to procedural issues. 

Procedural disenrollments particularly harm people who already face significant barriers to accessing coverage. National data indicates that Black and Latino individuals are most likely to be affected by procedural disenrollments. Families experiencing housing instability and families with limited English proficiency and limited technology literacy are also at greater risk of procedural disenrollment.

People who are covered by Medicaid have very low incomes — living on less than $36,777 a year for a family of three — and cannot afford to pay out of pocket for medical care or buy insurance. Unfortunately, the House’s bill would require people who are enrolled through Medicaid expansion with incomes just above the federal poverty level to pay co-payments for certain health services. These co-pays could be up to $35 per visit and are capped at 5% of the family’s annual income. Virginia currently does not charge any co-pays for people who access health care through Medicaid, meaning impacted individuals would face completely new out-of-pocket costs.

Too many families are already struggling to make ends meet with rising costs and an uncertain economic outlook. This new policy would make the cost of living even more unaffordable for over 147,000 people in Virginia who would be subject to new Medicaid cost-sharing. For a family of three just above the federal poverty limit — 101% of FPL is just $26,916 — this new provision could cost them up to $1,345 a year. For a family earning $517 a week, a new $35 cost could mean the difference between accessing health care, putting food on the table, or keeping the lights on.

The implementation of work reporting and increasing the frequency of eligibility checks for people enrolled through Medicaid expansion will increase the workload on local Virginia Department of Social Services offices. This would result in additional administrative costs for Virginia’s Medicaid program, requiring over half a million additional renewals each year. While the proposal includes implementation grants for states, the funding pales in comparison to the estimated costs of setting up and running a work reporting program and increased verifications. When Virginia considered creating its own work reporting requirement in 2018, two-year state and local costs were estimated to be at least $25 million alone.

Evidence from Georgia’s implementation of work reporting requirements highlights the expensive, counterproductive nature of this provision. In an effort to reduce the burden on social services staff, the state contracted with a third party to provide digital tools for collecting wage and employment histories. However, these tools proved unreliable, ultimately shifting the burden of verification back onto already overstretched, understaffed, and underpaid caseworkers. Georgia’s Pathways program faced significant challenges in enrolling eligible individuals and did not lead to improved employment outcomes. If the House’s bill is signed into law as-is, Virginia would need to raise new revenues — ultimately paying to kick hundreds of thousands of people in Virginia off health coverage — or reallocate resources from other priorities. 

Not only does work reporting not increase employment for people who are enrolled in Medicaid, but it could also put people out of work. By kicking people off coverage, thereby reducing federal funding for the state, work reporting requirements could lead to anywhere from 8,400 to 11,600 lost jobs in Virginia. Nationally, about half of the lost jobs would come from the health care sector, and the remaining from diverse sectors such as retail, construction, food production, and more. With reduced individual and business income, Virginia would miss out on an estimated $73 million to $102 million in state and local revenue.

Health care costs across the country continue to rise. But instead of focusing on lowering costs for all of us, some in Congress are rushing to kick people off their health care. Adding red tape through work reporting does nothing to improve our current programs and punishes people who may be fighting cancer or other serious conditions, gig workers, people between jobs, caregivers, and more. These choices will harm people by removing access to critical health coverage, and the ripple effects will ultimately harm our communities as a whole. As the Senate begins to consider the House legislation and propose their own changes, we urge our federal lawmakers to reject these backward and misguided Medicaid proposals and consider more effective and compassionate approaches to strengthening the Medicaid program.