Virginia Must Act to Protect Healthcare Access for Children and Families

What’s at Stake

The federal budget reconciliation bill signed into law this July, HR 1, includes steep cuts to programs that Virginia families rely on to meet their basic needs. HR 1 will present many challenges for families across Virginia—especially individuals’ ability to access affordable, high-quality healthcare for themselves and their children. Virginia’s General Assembly can, and should, take action at the state level to mitigate the damage and protect health coverage for Virginians. 

Studies show that children are more likely to be insured when their parents have access to health coverage. In fact, Medicaid expansion for adults has also boosted enrollment for children. Moreover, Medicaid expansion has improved access to prenatal care and made the transition to adulthood less difficult for children with chronic conditions.  

HR 1 will make Medicaid recipients jump through more hoops to keep their coverage, including doubling how often most adults must complete a renewal. These changes will have ripple effects for children’s coverage. Families will begin to receive multiple renewal notices throughout the year because of the differing renewal timelines for children and adults. Burdensome new eligibility rules are expected to result in many Medicaid expansion adults losing health coverage, and changing rules and confusion among households are likely to result in families mistakenly thinking children in the household lose coverage when a parent does.  

These changes also require effort to implement. HR 1 will add administrative burdens to eligibility workers at local departments of social services in Virginia, who are already overwhelmed. Increased workload for eligibility workers may cause increased employee turnover and longer wait times for families seeking vital health coverage and resources.   

New restrictions for lawfully present immigrants are also expected to impact healthcare costs for all Virginians. HR 1 narrows the definition of “qualified aliens” eligible for Medicaid, Medicare, and Marketplace subsidies. Any increase in the number of uninsured Virginians is likely to increase the strain on safety net providers and emergency departments. As it relates to the Marketplace, coverage will be unaffordable for lawfully present immigrants without access to subsidies, causing premium increases all around.  

What the State Can Do

In the aftermath of HR 1, families in Virginia are bracing for the worst, but there are actions Virginia’s General Assembly can take to mitigate the damage. In order to protect children and families, Virginia should: 

• Increase the income eligibility limit for FAMIS, making Virginia’s FAMIS programs consistent with the rest of the country. Currently, children and pregnant individuals are eligible for FAMIS if their household income does not exceed 205 percent of the Federal Poverty Level (FPL), which is currently $65,907.50 for a family of four. The national average income limit for similar programs is 250 percent FPL. Some states, including Alabama, West Virginia, and Pennsylvania, have extended eligibility up to 300 percent FPL or higher.  

• Extend eligibility for children’s Medicaid to age 21. This change will help provide healthcare coverage to young adults who are no longer eligible for Marketplace subsidies or Medicaid expansion because of the narrow definition of “qualified immigrant” in HR 1.  

• Simplify Virginia’s CHIP-funded insurance program, FAMIS. CHIP allows states to provide coverage to children whose family incomes are too high for Medicaid but too low to afford private health insurance. Virginia currently operates both a children’s Medicaid program and a separate CHIP program. The state can—and should—choose to administer them as one program instead. Simplifying the way children’s coverage is administered would reduce unnecessary costs, expand coverage for kids on CHIP, and bring in rebates for the CHIP program. 

• Use state funds to provide subsidies for Marketplace coverage to individuals with incomes of 200% FPL or less, who are no longer eligible for subsidies from the federal government due to immigration status. Without access to subsidies, Marketplace coverage will be unaffordable for lawfully present immigrants. This population tends to be younger and healthier, and without their participation, the risk pool will be smaller and sicker, causing premium increases for everyone. Certain lawful permanent residents or “green card” holders must wait five years before they are eligible for Medicaid—under HR 1, they will no longer have access to Marketplace subsidies if their income is 100% FPL or lower. Virginia can help keep these lawfully present immigrants connected with health coverage by filling this subsidy gap.    

• Make sure that our safety net providers, especially free clinics and community health centers, are adequately funded. The increase in uninsured Virginians due to changes in HR 1 will place greater strain on our safety net providers.  

Children will not be insulated from the negative impacts of HR 1. Interruptions in health insurance coverage can have devastating and long-lasting consequences for children and families. Reliable access to routine care is vital to making sure all children meet their developmental goals and stay out of the emergency room for preventable conditions.  

Healthy children become healthy adults. Maintaining consistent healthcare coverage for children and families is a societal investment in the health, stability, and future of our communities. Virginia must take advantage of the options it has to protect coverage for vulnerable populations and protect the stability of the health care system for all of us.