Nation's Capital Facing Dual Threats to Medicaid

By Sinyi Au

Washington, D.C. In the nation’s capital, the health and financial stability of more than 272,000 people – one in every three residents – rests upon one of the most generous Medicaid programs in the country.

Now, the promise of care is under an unprecedented threat on two fronts.

Here is what will happen in the next decade, when that safety net begins to unravel, dot by dot, under the weight of political decisions made by local and federal officials.

D.C. Budget Cut Lowers Eligibility Cap

For years, D.C.’s Medicaid program has allowed childless adults earning up to 210% of the Federal Poverty Level to enroll, which is $32,865 in 2025, a far higher limit than the 138% threshold used by most states. But in the budget approved in July, the city lowered its eligibility to 138%, which is $21,597.

The local budget cut will force an estimated 25,000 residents into the “Healthy DC” plan, which does not cover adult dental and vision care. Around 3,000 Medicaid members with income between 200% to 210% of the Federal Poverty Level will lose their subsidized coverage entirely.

For residents with mental illness or substance use disorders, the consequences of being moved to the less comprehensive “Healthy DC Plan” can be life-altering, according to Mark LeVota, the executive director of the D.C. Behavioral Health Association, which represents 35 organizations serving about 35,000 residents annually.

While the number of people losing access to the highest level of care – known as assertive community treatment – is projected to be between 20 and 50 people, the impact is immense, said LeVota.

“For that 50 people, that’s a major concern, not trivial at all,” he said. “For most of them, the expectation is that the assertive community treatment is what is keeping them out of the hospital or jail.”

Federal Law Adds Work Requirements

As D.C. trims its own rolls, a far larger threat looms at the federal level. The tax and domestic policy bill, known as the Big, Beautiful Bill, passed by Congressional Republicans in July, is poised to slash federal funding to the District by $3.6 billion and cause 46,000 residents to lose their Medicaid coverage over the next decade, according to an analysis by KFF.

The primary weapon of these cuts is a new work requirement mandate for most working-age adults, placing a huge group of residents, even those with no income, at the highest risk of losing their health care.

Starting in 2027, most beneficiaries between the ages of 19 and 64 will be required to document at least 80 hours of work or other community engagement activities per month to stay insured under Medicaid.

Proponents often justify the work requirements by stereotyping Medicaid recipients as lazy, a narrative that is directly refuted by experts. “The assumption is that the only ones who will lose coverage ‘are these able-bodied young adults sitting on their parents' sofa in the basement playing video games,” said Edwin Park, a research professor at Georgetown University.

“The overwhelming majority are either working or they're in school, they're caregivers, or they have disabilities or chronic conditions,” Park said.

The danger of work requirement lies not only in ineligibility but in bureaucracy. Rhiannon Euhus, a policy analyst at KFF’s Program on Medicaid and the Uninsured, warned that many will lose coverage simply because they cannot keep up with the reporting.

“People will definitely miss the reporting requirements,” Euhus said. “This will result in people losing Medicaid coverage who otherwise should keep it.”

The current cuts will hit the poorest D.C. residents the hardest. As the local D.C. cut removes those with higher incomes and places them in the “Healthy DC” plan. The federal work requirement will now primarily apply to people with incomes below 138% of the poverty line.

“People who make more money are the ones who are not subjected to the work requirements, and people who make less money will be,” LeVota said. “Which, just again, is another one of those things that doesn't make sense.”

He added that those lower-income residents who lose their coverage due to the federal rules have no safety net: “They can't afford to [buy commercial coverage]. So they will just be uninsured.”

The Financial Squeeze for Health Care Providers

The dual policies threaten to destabilize the city’s entire health infrastructure, which KFF’s analysis places among the top 10 hardest-hit jurisdictions in the nation.

The project 32,000 new uninsured residents will create a surge in “uncompensated care costs that hospitals will face,” Euhus said.

For the city’s nonprofit clinics, many of which operate on razor-thin financial margins, the loss of thousands of patients is a direct threat to their survival, according to LeVota.

“If an organization sees a 15% cut in the number of people that remain eligible for services, then they will make a 15% reduction in their staffing,” he said.

It will also divert resources of the providers meant to care for them. Health care providers often must step in to help patients struggling with paperwork to keep their coverage, according to LeVota.

“This will divert clinical services to administrative paperwork, and that overall is not good for the health care system,” he said. “Things could get worse. There’s no reason to think that they could not get worse.”

For a city with only “a handful of hospitals,” as Georgetown University professor Edwin Park noted, this pressure could be catastrophic.

“These cuts are the inevitable result of federal decisions… shifting costs to states and in turn forcing them to make really painful, harsh cuts,” Park said.

The Uncertain Future

The compounded effects of the two policies are set to collide over the next two years, creating a timeline of escalating consequences. The federal policies, LeVota said, will act as an “additional accelerant” to the damage already being done by the local cuts.

Amid this uncertainty, LeVota cautioned residents not to be alarmed or to despair prematurely. Instead, they should remain vigilant for official communications from D.C. Medicaid, the Health Benefit Exchange and their insurance carriers.

“People are going to get a lot of correspondence over the next few months and they need to read all of it because changes are coming,” LeVota urged.

“Meet your deadlines. Make your best efforts to keep your coverage.”