On Thursday, the House Finance committee originated a bill, HB 3518, that would “disenroll and eliminate state coverage” for the Medicaid expansion population if the federal match for the program is reduced. According to the most recent data available (December 2024), more than 165,000 West Virginians between the ages of 19-64 would lose their health coverage if the legislation were triggered, and the state’s health care economy would lose over $1 billion annually. This would more than double the state’s uninsured rate, harm health, put hospitals at risk of closure, and likely result in a significant loss of health care jobs throughout the state.
Since 2014, West Virginia has participated in the Medicaid expansion, which provides health coverage to non-elderly adults who meet income guidelines. This includes parents of young children, people with chronic and serious health conditions, adults with disabilities who do not yet qualify for Medicare or Social Security disability, low-income workers, and other adults. The federal government current pays 90 percent of the costs of covering this population, a percentage that could only change with an act of Congress. The originating bill would eliminate health coverage for the Medicaid expansion population if the federal match is reduced at all—meaning even if it went from 90 percent to 89 percent, resulting in the coverage loss of all 165,000 residents covered by the expansion.
In addition to the potential harmful impacts on access to health care, this would have major financial implications for West Virginia’s health providers and economy. Nationally, around 20 percent of hospital revenue comes from Medicaid, and it is slightly higher in West Virginia. Revenue from the Medicaid expansion makes up one-fifth of total Medicaid revenue, meaning the average hospital could lose at least five percent of its total revenue if this legislation were triggered, in addition to absorbing far more uncompensated care costs. Research shows states with the Medicaid expansion have better operating margins, provide less uncompensated care, and are less likely to close or offer fewer specialized services. In committee testimony, the West Virginia Rural Health Association (WVRHA), many West Virginia hospitals currently operate on very low (1 percent or less) or negative margins. According to the Center for Healthcare Quality and Payment Reform, 12 West Virginia hospitals are at risk of closing and five hospitals are at immediate risk of closing due to narrow margins. An official from the WVRHA testified this policy proposal would likely be enough to push some of those vulnerable hospitals over the edge.
Over the last decade (December 2014- December 2024) with the Medicaid expansion in place, West Virginia has seen health care sector jobs grow by 17 percent or 20,000 jobs. Over the same period, total nonfarm employment shrunk by 1.43 percent, or 10,400 jobs.1
A 2018 study by the WVU Bureau for Business and Economic Research estimated that cutting $10 million in state spending (and by extension forfeiting $29 million in federal funds), would result in a loss of approximately 520 jobs. If this legislation were triggered, West Virginia would forfeit approximately $750 million in federal funds by refusing to spend an additional $170 million to maintain coverage for the expansion population, likely resulting in thousands of jobs lost if we extrapolate from the BBER study.
Rather than preemptively passing legislation based on a hypothetical negative outcome from Congress to reduce the federal share of Medicaid, state lawmakers should focus on ensuring West Virginia’s federal delegation protects the 90 percent federal match for health coverage for 165,000 West Virginians.
Click here for shareable graphics on the potential impact by county.
See the county-level impacts of ending the Medicaid expansion below.
Source: WVCBP analysis of West Virginia Department of Human Services and Centers for Medicare and Medicaid Services (CMS) data
[1] WVCBP analysis of Bureau of Labor Statistics data
