President Donald J. Trump signed The One Big Beautiful Bill Act into law on July 4. Analysts and health care leaders predict the spending package's reductions to Medicaid and the Affordable Care Act (ACA) Marketplace coverage will have significant impacts on the vulnerable patients Virginia's free and charitable clinics serve and the overall health safety net. Altogether, approximately 300,000 Virginians could lose their healthcare coverage through the changes.
 
“This is the biggest cut to the healthcare safety net in decades, and it will have significant impacts in Virginia for years to come,” said Rufus Phillips, VAFCC CEO. “More than ever, Virginia's free clinics need the support of our state's elected officials and policymakers as we work to provide care to low-income patients. We believe every Virginian deserves access to basic healthcare services, and we remain committed to helping ensure no person falls through the gaps.”
 
Here's an overview of how the legislation will impact people seeking healthcare in Virginia:
 
Around the corner: Loss of enhanced ACA premium subsidies and other changes to the ACA Marketplace could affect 84,000 people in January
The budget bill includes several scale backs to the ACA Marketplace like a shortened enrollment period, the end of auto-renewals and does not extend the enhanced premium tax credits beyond their scheduled expiration at the end of 2025.
 
In total, nonpartisan health policy research organization Kaiser Family Foundation (KFF) estimates 84,000 Virginians will lose coverage without the subsidies and the ACA Marketplace changes.
 
More than 388,500 Virginians rely on the ACA Marketplace for health coverage. Enrollment has increased by 67% since 2020. 
 
According to KFF, people who earn four times the federal poverty level ($62,600 for an individual) would lose eligibility for subsidies and would need to pay full price for health plans. For example, a 60-year-old couple living in Virginia making $85,000 annually would see their premium payment increase by about $900-$1,100 monthly, or about $11,000-$12,000 a year, based on a KFF estimate calculator. 
 
The additional cost burdens could mean Virginians are priced out of the ACA Marketplace and would need to rely on free clinics and other safety net providers for care.
 
Work requirements will shrink Medicaid eligibility 
The law requires all people ages 19 to 64 to work or participate in community engagement for 80 hours per month starting as early as January 2027 or no later than January 2029.
 
 According to KFF projections, about 210,000 Virginians would lose Medicaid over a 10-year period due to the change, but the VAFCC expects the number of impacted people to be larger because of a Senate addition that makes parents with youth over 14-years-old meet work requirements. A Congressional Budget Office estimate hasn't been released yet for the final bill to predict the total number of affected patients.
 
Approximately 1.5 million Virginians utilize Medicaid – called Cardinal Care in the commonwealth – for primary care, behavioral health, dental and other health services. People can qualify with incomes at or below 138% of the federal poverty level. 
 
Lawmakers and states face significant unknowns related to the costs to implement work requirement reporting. To comply, states will need to build and invest in systems to track work hours for patients so they can report twice a year. A variety of states have previously attempted work requirements including Michigan and Arkansas. Georgia is the only state with current Medicaid work requirements, and it has cost nearly $100 million to implement there. Health policy experts indicate literacy and internet access barriers, busy schedules and challenges with reaching vulnerable populations, all contribute to the difficulty of implementing work requirements.
 
KFF estimates that about 92% of Medicaid enrollees work full or part-time, with the remaining people not working due to caregiving responsibilities, disability or school attendance. 
 
Cuts would put significant stress on the free clinics that accept Medicaid
Twenty-one of the more than 70 free and charitable clinics across Virginia are Medicaid providers and served nearly 26,000 Medicaid patients in 2024.
 
If a patient loses Medicaid, these same clinics will need to fundraise to cover costs for their care. In addition to medical care, Medicaid gives patients care options, covers transportation to appointments and enables people to access critical specialty care.
 
New patients would come at time when free clinics are already busy
With Medicaid cuts and ACA changes, about 300,000 Virginians or more won't have access to coverage. Ideally, these uninsured patients will seek care at local free clinics and other safety net providers instead of hospital emergency rooms.
 
However, this additional influx of patients would come at a time when the free clinic system is already overburdened. Over the past three years, patients at clinics increased by 48%. 
Anecdotal feedback shows that increased living costs along with rising needs for chronic care as well as dental and behavioral health services are leading more people to access care at safety net clinics.
 
 
Rural hospitals and behavioral health services vulnerable as well
Limiting people's access to Medicaid doesn't just impact Medicaid enrollees, it affects entire communities – especially rural areas. 
 
More than one-third of the state's 28 rural hospitals operate at a loss, due to the low reimbursement rates the organizations receive through government-funded health insurance programs. About 15% of rural hospital patients utilize Medicaid. Cuts to Medicaid would put greater strains on rural hospital budgets and impact operations, such as the closure of obstetrics service lines. 
 
The budget bill gradually cuts the maximum allowable provider tax in Medicaid expansion states such as Virginia from 6% to 3.5% over five years starting in FY2028.

Lowering these taxes will undermine the state's ability to fund Medicaid expansion and would decrease critical state directed payments to hospitals. These payments serve to bolster hospital Medicaid reimbursement rates, which are currently well below the cost of care.

In addition, Medicaid represents the largest payer for mental health services and plays an outsized role in covering substance abuse treatment programs. At free clinics, behavioral health services continue to be a growing need, with close to 30,000 patient visits in 2024. For adults experiencing mental illness who lose Medicaid coverage it means reduced access to treatment and other critical care.