Congress is quickly advancing a legislative package known as ‘budget reconciliation” that seeks to extend 2017’s expiring tax cuts, paid for in part by cutting more than $1 trillion from safety net programs that hundreds of thousands of West Virginians and millions of Americans rely on, including Medicaid and SNAP food assistance. The largest of these expected cuts is in Medicaid, which provides health coverage to nearly 1 in 3 West Virginians alongside major benefits to the state’s budget and overall economy, accounting for more than 20 percent of hospital revenues. The cuts Congress is reportedly considering would undermine health and economic gains the state has made in recent years including a historic reduction in the uninsured rate, unprecedented growth in health care jobs, and a dramatic reduction in drug overdose deaths.
In recent weeks, Congress passed a budget resolution, or framework, for the legislative package, in which the House version instructed the committee with jurisdiction over Medicaid to cut at least $880 billion. Up to this point, members of Congress have largely declined to elaborate on the policy changes that would achieve those cuts. But with the committee expected to mark up its legislation the week of May 7, we will likely soon see specifics. While some of West Virginia’s congressmembers have said that Medicaid cuts will be limited to “waste, fraud, and abuse”, Medicaid spending cuts of the size required represent 16 percent of the entire Medicaid program. According to reporting, very dramatic and unpopular cuts are under consideration, as the large-scale spending reductions being sought can only be achieved through policies that take coverage and/or benefits away from large numbers of people.
The cuts reportedly under consideration are targeting the Medicaid expansion specifically, including implementing work reporting requirements, reducing the federal share of funding for low-income adults on Medicaid, and capping federal funding to states.
States that have implemented the Medicaid expansion currently receive a 90 percent federal match rate (or “FMAP”) for adults covered through the expansion—meaning for every $1 the state spends, it receives $9 in federal funding to cover this population. In West Virginia, this group includes around 165,000 non-elderly adults including parents of young children, disabled adults not yet eligible for Medicare, and low-income working people.
Medicaid is also the largest source of funding for treatment of substance use disorder, and West Virginia has the highest rate of Medicaid beneficiaries receiving opioid use disorder treatment (7.5 percent) of any state, with the vast majority of those beneficiaries covered via the expansion.
One proposal reportedly under consideration would be to eliminate the enhanced FMAP for adults covered via the Medicaid expansion. This would reduce the federal share of spending for the Medicaid expansion population from the current 90 percent down to the match rate for the traditional Medicaid population, which is 74.22 percent in FFY 2026. If this reduced match had been in place in FY 2024, the state would have seen its share of state Medicaid match requirement nearly triple from about $100 million to more than $260 million. An analysis from the Kaiser Family Foundation found that West Virginia would have to increase spending by $2.3 billion over ten years to maintain coverage for the expansion population.
If a cost-shift to the state of this magnitude were enacted, West Virginia’s lawmakers have already made clear that they’d likely opt out of the Medicaid expansion rather than shouldering the increased costs via the state budget. During the 2025 legislative session, a bill to “trigger” the elimination of the Medicaid expansion if the federal match was reduced was tabled only after massive public pushback. If this policy were enacted and West Virginia were to eliminate its Medicaid expansion, an estimated 170,000 residents would lose their health coverage, more than 32 percent of total Medicaid enrollment statewide and a number much larger than the state’s current number of uninsured residents (101,000)—nearly tripling the uninsured rate.
The vast majority of non-elderly adults enrolled in Medicaid in West Virginia work or would likely qualify for exemptions to work reporting requirements due to caregiving responsibilities, attending schools, or having a serious illness or disability.
Despite that, Congress is reportedly considering cutting Medicaid by taking away coverage from those who do not meet a work reporting requirement, a policy West Virginia’s Senator Capito has said she supports. In West Virginia, this would put between 170,000 and 225,000 people at risk of losing their health coverage.
A wide body of research shows that work reporting requirements result in large health coverage losses, fail to increase work, and primarily cut people off from benefits who either are working or should qualify for an exemption. That is because the reporting itself is often complex and confusing, leading to coverage losses beyond that which might have been expected or preferred. One analysis found that had work reporting requirements been left in place in Arkansas’ Medicaid program, over time 97.7 percent of those required to report would have been noncompliant—not because they were not working or did not meet an exemption category, but because the paperwork is so cumbersome and automated processes are so error-prone.
In Arkansas, 24 percent of those subject to work reporting requirements lost their health coverage within the first year. Assuming Arkansas-style coverage losses in West Virginia, more than 40,000 residents could lose their health coverage, forfeiting more than $243 million in federal funds each year to our health care system and costing an estimated 4,500 jobs statewide annually.
Another option reportedly being considered to reduce federal Medicaid spending is to establish a fixed amount of funding that would be provided per enrollee, shifting any remaining costs onto state budgets. Currently, states receive a federal match that is proportional to actual costs, creating certainty for state budgets. If Medicaid expansion or all Medicaid populations were shifted to a fixed amount per enrollee, in West Virginia that could mean a cost shift of between $5 and $10 billion over ten years– an equivalent of increasing the state’s Medicaid spending responsibilities by up to 54 percent.
Again, if faced with cuts of this size, West Virginia lawmakers have made clear that the state will not absorb these new costs. Under a policy like this, lawmakers may reduce enrollment, cutting people off Medicaid entirely, or they may reduce or roll back benefits that are considered “optional under federal Medicaid rules—but are not optional in any real sense of the word. “Optional” Medicaid benefits include home- and community-based services for seniors and people with disabilities, prescription drugs, and substance use treatment services. State lawmakers might also address this cost shift by reducing reimbursements to providers.
Each of the proposals to reduce Medicaid spending would represent a massive cost shift from Congress onto the states—a move state lawmakers have made clear they would be unable or unwilling to shoulder. That means the costs would likely be further shifted downwards onto West Virginians—increasing health care costs for families or causing them to go without health care and reducing reimbursements for providers while increasing uncompensated care. State lawmakers, health care providers, and residents must join together to ensure our Congressional delegation rejects these cost-shifting efforts.
Take action now and urge our U.S. Representatives and Senators to reject cuts to funding for Medicaid and other vital programs here.
