Virginia will not be able to cover the full cost to fund cuts to social programs laid out in last year’s federal spending bill, Gov. Abigail Spanberger said Tuesday.
Her administration estimated $2 billion to $6 billion in lost revenue to the state annually starting in 2028 due to the loss of administrative funds, reductions in reimbursement for providers dependent on Medicaid and loss of enrollees in public programs.
The General Assembly set aside more than $500 million in the 2026-2028 biennial budget to cover new administrative costs and cuts to Medicaid and the Supplemental Nutrition Assistance Program through the federal spending bill.
“We are being required to spend millions upon millions to implement these new federal requirements and administrative processes,” she told reporters on Tuesday.
Spanberger signed an executive order Tuesday aimed at mitigating the effects of the federal spending cuts. But she acknowledged that the state will not be able to absorb the full cost of those cuts.
“The reality is that Virginia will not be able to make up the difference in a loss of federal funds, we will not be able to close the entirety of the gap caused by this catastrophic legislation,” she said. “We are working to mitigate every possible harm that we can as an administration, but to be clear, H.R. 1 — the so-called ‘One Big Beautiful Bill’ — was put in place as a cost-cutting mechanism at the federal level.”
The federal spending bill, H.R. 1, was passed by Congress in July 2025. It makes sweeping administrative changes to the Medicaid and SNAP programs, including new eligibility requirements and changes to the way doctors and hospitals are paid, and it increases the state’s cost and responsibility share for the programs.
“The scale of this challenge is significant,” said Marvin Figueroa, Virginia’s secretary of health and human services.
Federal changes to Medicaid and SNAP
More than 1.8 million Virginians are enrolled in Medicaid and nearly 800,000 in SNAP, the governor’s office said.
The federal spending bill is expected to go into effect Jan. 1, 2027, but the impact of the bill on Virginians might not take place all at once.
The Spanberger administration estimated that 300,000 Virginians are at risk of losing access to the two programs due to new requirements laid out in H.R. 1, Figueroa said. Those losses could be due in part to new work requirements and federal changes in criteria to qualify, or because a submission form was missed or misunderstood by the recipient or the process became too difficult to navigate.
Medicaid expansion recipients must resubmit eligibility paperwork every six months instead of the current requirement of once a year.
Expansion of the Medicaid program, which provides healthcare coverage for low-income people, was introduced in the Affordable Care Act in 2010. Since then, it has been adopted on a state-by-state basis. The General Assembly voted to expand Medicaid in 2018, allowing Virginians to qualify for the program if their income is below 138% of the federal poverty level.
Federal changes will also reduce retroactive healthcare coverage through Medicaid — which covers healthcare costs incurred in the three months prior to qualifying for the program — and will require states to use additional measures to identify duplicate enrollments. It also narrows eligibility for lawful noncitizens.
Healthcare providers are also expected to see a significant reduction in federal support through changes to Medicaid.
Those changes could mean fewer people visiting the doctor, Spanberger predicted.
“That means there will be individuals who will forgo that well-baby visit or that trip to the doctor’s when they’re not feeling well and they will show up in the emergency room a few days or a few weeks later,” Spanberger said. “We will be shifting the cost of health care to emergency rooms and we know that is the most expensive.”
Changes to SNAP — the program formerly known as food stamps — include an increased cost share for the commonwealth tied to Virginia’s error rate. The federal legislation added new guardrails for states with payment error rates above 6%; the higher the error rate, the higher the state’s cost share, according to the U.S. Department of Agriculture. Error rates can include underpayments or overpayments to recipients, incorrect calculations, incomplete information and administrative mistakes.
Virginia’s SNAP payment error rate was 12.32% in fiscal year 2025, the 14th-highest in the country, according to USDA data. The commonwealth’s cost share of the federal SNAP program will increase from 50% to 75% due to that error rate, Figueroa said.
“That is a significant increase in our cost to administer the program,” he said. “Virginia cannot erase every consequence of this federal law — we cannot replace every lost federal dollar and we cannot promise that no one will lose coverage.”
Spanberger said Virginians have already begun losing access to SNAP, and that cost will be borne out in communities through pressure on local food pantries and other more localized social programs.
Spanberger’s executive order
Executive Order 20, which Spanberger signed Tuesday, laid out her plan to contend with H.R.1-related cuts. The administration’s effort seeks to mitigate “harm by preventing gaps in coverage, improving statewide coordination, promoting economic mobility, keeping Virginia families safe and healthy, and prioritizing affordability,” according to a statement from the governor’s office.
The governor’s office did not respond when asked how much it could cost to implement the executive order, nor when asked if federal changes to the social programs could lead to a deficit in Virginia’s budget.
The executive order establishes the “Keep Virginia Covered” policy to guide how executive agencies implement new requirements laid out under H.R. 1.
The goals of the executive order are, according to the governor’s office, to:
- Keep every eligible Virginian enrolled and covered under Medicaid or SNAP;
- Minimize barriers to enrollment and renewal wherever federal law allows;
- Provide opportunities for economic mobility, workforce development, and employment resources;
- Provide alternative opportunities for coverage and access to health and food services where feasible; and
- Build public-private philanthropic partnerships to support initiatives where the state government alone cannot fill the gap left by reduced federal funding.
“It’s gratifying to see the Governor focused on something other than unconstitutional gun grabs and gerrymandering,” said House of Delegates Minority Leader Terry Kilgore, R-Scott County, when asked about the executive order.
“But if she really wanted to help Virginians, she’d be advocating for lower power bills, car tax relief, grocery tax relief, and other ways to make everyday life more affordable for Virginians.”
Figueroa is expected to provide quarterly updates to the governor’s office on the progress in implementing the executive order. Those updates are expected to include coverage losses, outreach efforts and campaigns, as well as budget implications.
