Health Care Leaders Sweat Federal Medicaid, Obamacare Changes At Politico Summit

States are scrambling to implement the Medicaid work requirements Congress imposed as part of last July’s One Big Beautiful Bill Act — a policy predicted to kick millions, including many working adults, off federal insurance when it takes effect nationwide next January.

While a small handful of states plan to start enforcing the rules in May and July, most say they need the rest of the year to upgrade their tech and hire dozens, if not hundreds, of new employees to determine who should remain enrolled and who should be booted from the safety-net health insurance program.

Marvin B. Figueroa, Virginia’s Secretary of Health and Human Resources, said at POLITICO’s Health Care Summit on Tuesday that it will cost the state “upwards of 60 million” to implement.

“We are looking at everything from changing our eligibility systems, new vendors are being brought on board, new staffing models … then you have to create a whole new data and privacy infrastructure, because as you implement the work requirements, you have to ensure that those documents that prove that you're actually working can be uploaded safely,” he said.

The only states that have previously enacted similar rules — Arkansas and Georgia — experienced high costs to implement them, no growth in employment and significant insurance losses.

Figueroa predicts a similar outcome in his state.

“At some point or another, folks are gonna lose coverage because of this legislation,” he said. “So I wouldn't mind that we're investing $60 million if it was being invested in keeping people covered and making that coverage much more comprehensive and much more affordable, but we're doing it on work requirements instead.”

Whether the policy will pay off, he added, is “debatable at this moment.”

Health care providers around the country warn that the new rules will take a toll on their already precarious finances.

Dr. Marc Boom, president and CEO of Houston Methodist and chair of the American Hospital Association, said at the POLITICO summit that he’s bracing for the work requirements to increase the number of uninsured Americans who can’t afford primary care and lean on clinics and hospitals in emergencies.

“We're watching people lose coverage. And, well, when you lose coverage … guess what happens? Those patients don't stop getting sick,” he said. “They just come to our emergency rooms, and they get care when they're much sicker than they would have been had we actually had a longitudinal health care process for them to care for them.”

That rise in uncompensated care, he added, will force his hospital and others to ask themselves: “What services can we continue to provide or not provide?” At the top of the list to be sacrificed, he said, will be mental health and maternal health care, especially in rural areas.

Both Bloom and Figueroa also stressed that the $50 billion Rural Health Transformation Fund that Congress tucked into the One Big Beautiful Bill Act will not come close to making up for what states are set to lose in Medicaid funds in the coming years.

“It's in the context of us losing billions of dollars on one side and getting $189.5 million on the other side,” he said. “So it's not intended to be dollar for dollar. As my sister would say, the math ain't mathing.”

The scarcity of resources, he added, forces the state “to think about the delivery of care in a much more creative way.” But no matter how much creativity and collaboration Virginia embraces, he cautioned, “There's going to be some disruption in care given the fact that we're losing so much other financial resources on the other side of the house.”

Also weighing on all stakeholders in the health care system, from state officials to providers to insurers, is Congress’ failure to extend enhanced Obamacare subsidies for tens of millions of Americans, which has led to a spike in the number of patients becoming uninsured or switching to skimpier high-deductible health plans.

“People still bought coverage, even though they did it with a lower subsidy,” said Cathy Grason, vice president, associate general counsel and head of government affairs for Oscar Health. “We were challenged to design products that meet people where they are, at an affordable price point. But let's be real, for a lot of folks, that's higher deductibles, and that's not great.”

A recent survey by the health policy research group KFF found that more than half of those polled said they plan to deal with premium increases caused by the lapsed subsidies by cutting spending on food and other basic household needs.

About a dozen states are trying to shield their residents from those impacts by back filling some or all of the lapsed subsidies, but they can’t afford to completely cover the lost federal funding or can’t afford to do so for long. Most states, meanwhile, have taken no action — including both conservative states where leaders oppose the Affordable Care Act and states with progressive leaders who support the program.