Earle-Sears: Use Rainy Day Fund to Cover Medicaid Cuts- Dogwood Daily Dispatch

Earle-Sears Suggests Rainy Day Funds Can Cover Medicaid Shortfall

Republican warnings concerning the cost of Medicaid expansion are proving correct as the federal government seeks to close a $2 trillion budget deficit.

Published August 29, 2025

Lt. Governor Winsome Earle-Sears suggested using the state’s $4.7 billion “rainy day” fund to cover increased Medicaid expenses should the federal cuts made by the One Big Beautiful Bill.

Under new federal guidelines, Virginia could face a $29 billion decrease in Medicaid spending over the next 10 years. Trump’s $1 trillion cuts are designed to help rein in runaway spending from Washington that has led to nearly $2 trillion annual federal deficit spending.

In 2018, Democrat leadership in Virginia expanded Medicaid, a move criticized by Republicans for the possibility of increasing state costs. Under the new law, states which did not expand Medicaid are facing substantially lower funding concerns with those that did.

“We want to make sure that whatever happens with Medicaid, we have the money here to help,” Earle-Sears said at an even in Marion. “We have the money and the budget to help.”

The Lt. Governor says she has met with rural hospital networks as well as Congressional leaders and that there are already solutions in the works on a federal level. (RELATED: Parent’s Rights in Education Still a Major Concern For Voters)

Think this is most Lt. Gov. Winsome Earle-Sears has said about potential Medicaid cuts

She ends with “don’t panic, things are being worked out”

Changes to Medicaid won’t hit in time for this year’s election, but will an issue voters will think aboutpic.twitter.com/DRUkOfi0na
— Sam Shirazi (@samshirazim) July 11, 2025

Democrat Senator Creigh Deeds, a senior member of the Senate Finance and Appropriations Committee, opposed using the rainy-day fund to solve a long-term Medicaid funding problem.

Known colloquially as the “rainy-day fund,” the Revenue Stabilization Fund provides the Virginia Government with a savings account to help offset unexpected revenue shortfalls.

Governor Glenn Youngkin and Lt. Governor Earle-Sears have both expressed support for the One Big Beautiful Bill for its efforts to balance the budget and create economic growth.

“It truly delivers on the bold promises all Republicans made to the American people to restore the security, prosperity and fiscal sanity for our nation,” Youngkin said.

Most of the cuts in Medicaid come from work requirements and related changes to the social safety net. It is still unclear how much the work requirements will impact Virginia’s bottom line.

“I do believe we need to explore all options if the federal cuts do result in a significant impact,” said Del. William Morefield (R-Tazewell County). “Medicaid is vitally important in rural areas. Rural hospitals rely heavily on Medicaid to operate. The closing of a rural hospital would be devastating to a local community as we have already experienced in Southwest Virginia. It severely impairs a locality’s ability to attract, recruit, and retain businesses and new residents.”