With the Trump administration’s “One Big, Beautiful Bill” now law, Delaware leaders gather for a Medicaid roundtable to prepare for program cuts and discuss relief efforts.
The federal budget reconciliation package is expected to reduce federal Medicaid spending substantially over the next 10 years, with estimates ranging close to $1 trillion, and 10 million people are expected to become uninsured by 2034 based on Congressional Budget Office estimates.
"When the bomb goes off, not only do 10 to 20 million Americans lose coverage, but the collateral damage, as you all know, extends far beyond — it extends to everyone else," Congresswoman Sarah McBride said to various Delaware state and healthcare leaders. "We know that when patients lose coverage, they don't never get care, they just get care later, when it's more expensive, and often in the emergency rooms of the hospitals. And of course, someone has to pay for that care when it happens — that is a cost that all of us end up dealing with."
The most substantial change to the Medicaid program that is expected to cut federal spend by close to $330 billion per year alone is the implementation of work requirements.
This means that individuals will need to prove “qualifying activities,” like work or community service, for at least 80 hours per month to qualify for or maintain Medicaid coverage.
There are some exemptions, like for parents with children ages 13 and under and for individuals who are “medically frail,” but Delaware Medicaid Director Andrew Wilson says that term has yet to be defined.
Wilson notes the 250,000 Delawareans on Medicaid don’t need to worry now, but these changes must be implemented by the end of 2026. He says it comes down to working with enrollees to make sure compliance is met so coverage isn’t lost.
“The biggest way that Delaware is going lose money is by Medicaid losing enrollment, and Medicaid members will lose enrollment only if we don't make necessary infrastructure investments to help them stay on," Wilson explained. "And so the governor's goal is to bring that number to zero and try to lose nobody off the rolls because a work requirement is essentially a paperwork requirement at the end of the day because the vast majority of people on Medicaid are working.”
Wilson says the state is still waiting on guidance from the Centers for Medicare & Medicaid Services (CMS) for how these new requirements must be implemented in order to get a picture of what's at stake for the First State.
“I'd say probably in almost exactly a year. Next summer is when the state will really be putting out, ‘Hey, listen, like you need to engage with us, here's how to engage with us, here's how we're gonna work with you to maintain your coverage as best we can,'" Wilson said, noting Medicaid participants don't need to worry about their coverage eligibility just yet.
While the details are still being worked out, Wilson says the state is planning a three-pronged approach to make sure enrollees don't lose coverage.
The biggest strategy is making vast improvements to ASSIST, which is Delaware's online application to apply for health and social service programs.
Wilson hopes to streamline this resource to make it "beneficiary centric," ensuring those seeking coverage can properly fill out all the necessary forms without a hitch.
Wilson says the state also intends to develop an "ex parte" system, which would allow the Division of Health and Social Services to verify information about an enrollee without further engagement.
"Can the state gather enough information about, are they working, are they in an education program, what their income requirements are — can we verify that without having to talk to them at all, and then essentially, can we sort of auto0enroll them to ensure that, again, they don't have to interact with us with us at all, ideally," Wilson explained.
The third effort would be creating a work program, similar to what's in place for SNAP, to help individuals meet the work requirements if they don't already.
As pointed out by Congresswoman McBride, one of the main concerns of the healthcare industry is that the cost burden will simply shift to hospitals and providers if residents seek care without insurance.
Congress did make an attempt to mitigate these impact to some extent by creating a $50 billion Rural Health Fund.
Delaware, like all states, is poised to receive at least $500 million over the next five years to help keep rural health systems afloat who often serve high populations of Medicaid participants.
Deputy Policy Director for the Office of the Governor Kevin Myers says the state is still waiting on clarification from CMS on how those funds can be spent, but the state is expected to submit its plan on how it will spend the funds by November of this year.
The governor's office intends to send out a form in the coming days seeking feedback for what individuals would like to see in that plan to make sure the rural health funds get spent in the most effective way across the state.
This fund is particularly geared at helping to offset another federal change to the Medicaid program, which is placing a moratorium on provider taxes, keeping current taxes in place but prohibiting states from establishing any new provider taxes or from increasing the rates of existing taxes.
Delaware does not currently have these types of taxes in place, but it was aspirational about doing so when then-State Sen. McBride championed the Protect Medicaid Act of 2024.
Congresswoman McBride's bill was supposed to go into effect on July 1, 2025, and would impose a 3.58% tax on hospitals' net patient revenues, which correlates to more than $100 million in new Medicaid funding for Delaware.
But with the new federal law, Wilson says this may not be a possibility for the First State, although he has not lost hope.
"Rural hospitals are expected to take a big brunt of the hit on this because they — other states, not Delaware — but other states are going to have a lot of these financing provisions pulled out from under them that are going to directly affect hospital bottom lines, and so that [rural] hospital fund was designed to help fill some of that gap," Wilson explained. "Delaware's in a slightly different position where our hospital tax is more of a lost opportunity if we don't get it because we don't have it now. We're we're working on it, we would love to get it, we're working very hard for it."
State Sen. Marie Pinkney (D-Bear), Chair of the Senate Health and Social Services Committee, says this is not the only time state leaders will convene to discuss the impacts of the changes to the Medicaid program.
"Us being together in one room is the only way that we're going to figure out where our gaps are, where we're not doing well and what we need to do," Sen. Pinkney said. "And so this conversation was really a first step to that. Again, I don't think it needs to be as formal as a task force because we really don't know what we're doing— what we're dealing with yet, but I think being in a space where we can just all have conversations, all be in the same room, hear what one agency is struggling with and how another agency is dealing with that in a positive way, for us as a state to learn what our partners are struggling with and how we can fix it, I really think that's the first step to find any type of solution."
The only "instant" change to the Medicaid program with the "One Big, Beautiful Bill" becoming law is the inability for Planned Parenthood to bill Medicaid, but that change is currently tied up in the courts, leaving the allowability in place for now.
