This story was reported and written by our media partner Capital News Service.
The state of health care in Virginia, especially in rural areas, is uncertain after changes in federal funding.
The Rural Health Transformation Program is part of President Donald Trump’s recently passed budget reconciliation bill, known as H.R. 1 or the “One Big, Beautiful Bill Act.”
The program earmarks $50 billion for rural health care, but is divided in such a way that leaves advocates concerned about spending gaps left by incoming Medicaid cuts. Half of the funding also comes with specific criteria to qualify, and half is not guaranteed.
Half of the $50 billion will be divided equally among states who apply, subject to approval from the Centers for Medicare & Medicaid Services.
The other half will be awarded based on individual state metrics and applications that reflect the greatest potential for and scale of impact on the health of rural communities, according to a press release from the center.
The legislation may result in $58 billion in Medicaid cuts over 10 years, which will impact rural hospitals, according to an analysis presented to the Senate by Manatt Health.
States with higher rural populations that often rely more on Medicaid will be hit the hardest.
Virginia Impact
Virginia could receive up to $500 million of the funding over the next five federal fiscal years to support access to health care in rural communities, according to an executive directive from the governor’s office.
Gov. Glenn Youngkin instructed state and local government health care agencies to work with representatives from major health care providers and develop a plan that leverages Rural Health Transformation Program funding.
Approximately 350,000 Virginians may lose health care coverage, primarily from Medicaid, according to Ashley Apple, commissioner of government relations for the Virginia Nurses Association.
The ripple effect would be that health care facilities could close if they lose the many rural patients who depend on Medicaid for treatment. For example, about 21% of residents are on Medicaid in the 6th District, which spans a large portion of west-central Virginia, including Augusta County, according to the Virginia Department of Medical Assistance Services.
Augusta Medical Group has already closed an urgent care clinic and two primary care clinics in response to the federal legislation, according to a press release.
Youngkin’s executive directive includes beneficial plans to improve rural health care, but the confines of the federal bill will still cause issues with adequate funding, according to Apple.
“I commend the governor on looking at really important issues related to rural health, but ultimately the size of the bucket itself is not big enough,” Apple said.
The looming gubernatorial election will play an important role in the state’s future, because the winner will affect how the state mitigates funding losses, Apple said.
“The state is really going to need to consider what we prioritize,” Apple said. “I hope that we come to the decision that [the] health and well-being of all community members is important enough to make those investments.”
It will take a bipartisan effort to balance fiscal constraints. There also needs to be a focus on caring for vulnerable patients and making sure low-income residents still have access to food assistance and health care, Apple said.
‘Lifeline for Rural America’
Medicaid is funded through a federal-state partnership, according to Alexa Abel, government affairs and policy director with the National Rural Health Association. Some funding comes from the federal government, and the state is required to generate some of its own funding. Virginia has a trigger law that ends Medicaid expansion if federal funding dips below 90%.
States will have to make tougher decisions with tight state budgets, such as raising taxes or cutting other program funding.
“When there is any kind of cut from the federal share, states are going to have to figure out how to make up for that themselves, which is really hard because state budgets are pretty tight,” Abel said.
Medicaid is a “lifeline for rural America,” Abel said.
However, it is hard for health care providers to sustain services when there is not much patient revenue, said Keith Mueller, Gerhard Hartman professor of Health Management and Policy at the University of Iowa.
Smaller, rural hospitals can use the next 12 months before funding cuts to prepare and identify potential revenue losses, according to Mueller.
States also have a December deadline to apply for Rural Health Transformation Program allotments, according to a press release.
There are possible benefits to Trump’s budget legislation, according to Mueller. States can receive indirect financial support to pay for new technology and community improvements.
Residents worried about their health care should understand their options, Mueller said.
They can find organizations that connect people with health care opportunities, build strong relationships directly with providers and understand how to navigate the system.
Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Communication. Students in the program provide state government coverage for a variety of media outlets in Virginia.