May 16, 2025

Richmond, VA – A new budget proposal in the U.S. House of Representatives would slash Medicaid funding and make it harder for millions of low-income Americans — including hundreds of thousands of Virginians — to keep their health insurance. The plan would cut at least $715 billion from Medicaid over the next decade, potentially leaving 13.7 million people without coverage, according to the Congressional Budget Office.

Virginia Poverty Law Center (VPLC) is urging Congress to reject the proposal and protect Medicaid — a program that serves nearly two million Virginians and underpins the state’s entire health care system. Cuts of this magnitude would devastate rural hospitals, weaken public health infrastructure, and put vulnerable communities at greater risk.

“Medicaid has supported American families for 60 years,” said Emily Hardy, Deputy Director of VPLC’s Center for Healthy Communities. “This proposal handcuffs states’ ability to fund Medicaid cost increases and improvements by eliminating the program’s long-time funding mechanisms — and puts coverage at risk for millions.”

The plan also proposes two major new bureaucratic hurdles for people to keep their Medicaid coverage: doubling the number of required renewals each year for people enrolled in Medicaid Expansion and implementing nationwide work requirements. While 92% of Medicaid recipients already meet work requirements, many could lose coverage simply for failing to navigate complex paperwork and documentation rules.

“This proposal doesn’t just raise the bar — it adds barbed wire,” said Hardy. “And it forces people to get through those obstacles twice a year just to keep their health care.”

Research shows that work reporting requirements do not meaningfully improve employment outcomes. In fact, health coverage itself is one of the biggest factors helping people stay employed. These rules would also come with a hefty price tag, costing states hundreds of millions of dollars to implement due to increased administrative needs.

Other harmful provisions in the proposal include:

• Reducing Medicaid’s retroactive coverage from three months to one, which would harm individuals facing sudden or life-altering medical events.
• Capping the value of a person’s home when qualifying for long-term care without accounting for inflation — a move that would particularly affect older Virginians.

“Medicaid is a lifeline for people in Virginia,” said Hardy. “It supports our health care systems and ensures low-income children, adults, and older residents get the care they need when they need it. We reject this proposal as yet another attack on Virginians’ access to life-saving health care.”

###

Virginia Poverty Law Center (VPLC) is the state support center for all civil legal aid programs in Virginia. VPLC’s work breaks down systemic barriers that keep low-income Virginians in the cycle of poverty through advocacy, education, and litigation. Visit vplc.org for more information.

Contact: Mara Guyer, Strategic Communications Manager, Cell: 804-801-2927, mara@vplc.org