“Big Beautiful Bill” could deepen losses for Virginia hospitals

CHARLOTTESVILLE, Va. (WVIR) - Some Virginia hospitals are already losing money by treating patients, and a new federal law could make that worse.

“Our latest estimates are that that’s a 35 billion dollar hit in funding to Virginia over a decade,” said Julian Walker, vice president of communications for the Virginia Hospital & Healthcare Association.

HR 1, also known as the “One Big Beautiful Bill,” passed this year and cuts federal Medicaid spending by about a trillion dollars nationwide over the next decade.

In Virginia, hospitals pay a special tax that helps fund Medicaid expansion and pulls down extra federal money that helps cover the true cost of care. The Virginia Hospital & Healthcare Association says HR 1 chips away at Medicaid and Medicare programs.

“Those two provisions essentially weaken or water down the financial benefit of those programs,” Walker said.

A federal Rural Health Transformation Fund was established to offset the losses and will send a combined $50 billion to states over the course of five years. Virginia will receive $189 million each year. Walker says that may not be enough.

“Of course we are going to engage and be a participant in the process, but it’s also important to put it into perspective and understand that the magnitude of the cuts in HR 1 are significant,” he said.

Rural hospitals are especially exposed. On average, 7 in 10 rural patients are on Medicaid or Medicare programs. Both pay hospitals less than the actual cost of care.

Right now, about 44% of Virginia’s rural hospitals are operating in the red.

Those losses could result in longer waits for appointments, more pressure on emergency rooms and higher costs for care.

Walker says hospitals have been able to adapt in the past, but there may come a time where no creative problem solving can offset the deep budget cuts.

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