WA officials warn ‘Big Beautiful Bill’ will wreak havoc on Medicaid system

With an American flag pin on his lapel, President Donald Trump signed into law the One Big Beautiful Bill Act on July 4.

It was a moment that many Washington state officials have been dreading.

That’s partly because the new law — which Democrats often deride as the “big, ugly bill” and the “big betrayal of a bill” — enacts seismic shifts to Medicaid, which provides health coverage for low-income people.

Proponents of the far-reaching tax and policy bill note that it extends tax cuts, supports small businesses and expands immigration enforcement. But critics say that it also erodes the social safety net — including through food-stamp cuts — and contend that it mostly benefits the wealthy while making life harder for people already struggling to make ends meet.

Democratic Gov. Bob Ferguson said in a July 9 press conference that it’s hard to overstate how “devastating” the Big Beautiful Bill’s cuts will be for Washington state residents and hospitals that depend on Medicaid reimbursements.

“They will bring our health-care system to the brink and harm people in every corner of our state,” he said.

Washingtonians relying on Medicaid

About 1,860,000 kids and adults are enrolled in Washington’s Medicaid system, called Apple Health, according to KFF, a nonpartisan health-policy research organization. That’s more than 1 in 5 Washingtonians.

KFF also reports that Washington is one of the states that will be most affected by the cuts; Medicaid enrollment may eventually drop here by 26%.

Ferguson’s office says at least 250,000 residents will lose Medicaid coverage.

U.S. Rep. Pramila Jayapal, a Washington Democrat, said during a July 9 news conference the state stands to lose between $31 billion and $51 billion in federal Medicaid dollars over the next decade.

Ferguson noted that such reductions will amount to at least $3 billion annually. His office says that the state spends $21 billion on Medicaid each year, with the federal government paying $13 billion.

House Speaker Laurie Jinkins, a Tacoma Democrat, has previously warned that if federal Medicaid dollars disappeared, “there is not a state in this country that can backfill that in any way, shape or form.”

After the passage of the law, Ferguson said in an emailed statement to McClatchy that his office doesn’t believe a special session of the legislature is necessary at this time to address the cuts. But his team will continue to review the final bill’s details.

KFF notes that there won’t be many tangible health-care effects from the new law before next year’s midterm elections.

Robin Rudowitz, who heads up KFF’s Medicaid and uninsured work, said in a recent virtual press call that states will be left with hard decisions amid diminished federal Medicaid support. Generally, states must balance their budgets annually, she said.

States will be left to decide whether to boost taxes to cover the gap or cut program spending in other places such as education, Rudowitz said.

WA health-care exchange

Washington was “at the forefront” of expanding health care coverage under the Affordable Care Act (ACA), Ferguson said July 9. But the new federal law effectively unravels that progress.

Aside from those who could lose their Medicaid coverage, another 150,000 residents could be “priced out” of the state’s health-care exchange, he said.

The bill didn’t extend a tax credit that reduced health-insurance premiums for millions of Americans enrolled through the ACA marketplace. Consequently, average out-of-pocket premiums could increase by more than 75% next year, according to KFF.

Folks who wind up losing Medicaid coverage likely won’t be able to afford plans in the exchange, said Jacqueline Barton True, vice president for advocacy and rural health at the Washington State Hospital Association.

“You might see the odd case out where someone gets off of Medicaid, has been working, is able to cobble together sufficient funds to purchase one of those plans in the exchange,” she told McClatchy. “That is not going to be the experience of the majority of folks who lose health care coverage through this bill.”

Some 4 million people nationwide are estimated to eventually lose their coverage because of the expiration of the enhanced premium tax credits — though that could be somewhat delayed, said Cynthia Cox, who leads KFF’s Program on the ACA. Some could keep their Marketplace coverage at first by dropping down to a plan with a higher deductible or by paying more every month.

“But then eventually, 4 million more people will be uninsured,” Cox said at KFF’s recent virtual news conference.

Republican support for BBB

U.S. Rep. Michael Baumgartner, a Washington Republican who represents the eastern quarter of the state including Spokane, praised the Big Beautiful Bill in a July 3 news release, citing its support for small businesses and border security. He also noted it locks in Trump tax cuts from 2017.

Baumgartner further highlighted the $50 billion it provides for rural health care in a fund called the “Rural Health Transformation Program.” However, KFF has said that federal Medicaid spending in rural areas will likely plummet by $155 billion over a decade.

Republican U.S. Rep. Dan Newhouse said in a press release that the bill isn’t perfect. But, he added, it boosts the Child Tax Credit, “unleashes American energy production to lower costs and reduce inflation” and more.

“It makes the largest-ever investment in border security and makes our nation safer by strengthening our military,” he wrote. “I was able to secure continued investment in our current and future nuclear energy fleet, which is vital to the Tri-Cities and the surrounding region.”

Newhouse said the legislation offers crucial assistance to ranchers and farmers, too.

Washington State Republican Party Chairman Jim Walsh said the Medicaid and Planned Parenthood parts of the bill represent only a small portion. At roughly 900 pages, it covers plenty of ground — including with tax policies.

“Some on the left complain that it’s tax breaks for billionaires,” Walsh said. “And yeah, they do get a lower tax rate, lower net tax, because of it — but so do middle-class people.”

Walsh, who’s also an Aberdeen state representative, decried critics who say that thousands will lose health care as “manipulative and cynical.”

The chairman highlighted the legislation’s requirements for how able-bodied people can benefit from Medicaid. He said the bill recenters the Medicaid system’s lens toward people with disabilities, lower-income seniors and the vulnerable, such as single parents with young kids.

“What the reconciliation bill’s policy changes do is kind of return the focus to the original core beneficiaries,” he said. “That’s a good thing.”

Medicaid paperwork requirements

The vast majority of adults who are able-bodied and on Medicaid are working, said Barton True with the Washington State Hospital Association. For Medicaid adults in Washington, KFF puts that figure at 70%.

Barton True said she’s worried about eligible people being turned away from Medicaid because of onerous new paperwork demands. They’ll have to prove they’re meeting those requirements at a regular cadence, she said — at least every six months, if not more frequently.

“It’s quite possible it’ll need to be every month to prove that working requirement, which means basically, folks are going to have to do the equivalent of, like, filing their taxes every month,” she said.

Other provisions make this process more burdensome, Barton True added: “Like you can no longer auto-populate forms with the information that the state already has on these folks.”

Walsh dismissed such concerns.

“I mean, you’re applying for a government benefit,” he said. “You’ve got to fill out some paperwork.”

WA hospitals at risk of closure

Both rural and urban hospitals will shutter as a result of the bill, Ferguson has warned. By 2031, Washington will miss out on $1.5 billion or more in hospital reimbursements, his office says.

“You may not depend on Medicaid, but guess what?” Ferguson said at the July 9 news event. “The hospital you go to, they depend on those reimbursements.”

Critics have warned that the bill threatens the existence of rural hospitals especially; rural Americans are more likely than their non-rural counterparts to depend on Medicaid, according to PBS. And last month, U.S. Sen. Ed Markey, a Massachusetts Democrat, published a list of more than 300 such facilities nationwide that are at disproportionate risk of conversion, service reductions or closure.

Barton True said if rural hospitals close, that won’t mean those patients will stop having babies, getting in car accidents or suffering from strokes. It’ll just lead to a bigger backlog in urban areas and longer wait times.

Washington state is already 50th in the nation for hospital-bed capacity per capita, she noted.

“If you take any beds out of the system, there’s just not a lot of capacity to absorb that at this stage in the game,” Barton True said. “So that’s a real challenge.”

But even if someone no longer qualifies for Medicaid, Barton True said they’ll still be treated if they find themselves headed to the emergency room.

“It is our mission to serve whoever comes into the door, regardless of their ability to pay,” she said.

This story was originally published July 15, 2025 at 5:00 AM with the headline "WA officials warn ‘Big Beautiful Bill’ will wreak havoc on Medicaid system."

Simone Carter

The Olympian

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