Federal changes under H.R. 1 are reshaping how Medicaid works in Washington. State lawmakers have begun examining funding options in response.
Coverage Losses
Apple Health, Washington’s Medicaid program, covers close to 2 million Washingtonians. The Health Care Authority projects 200,000 to 320,000 of them will lose coverage as the federal changes take hold. About 20,000 lose eligibility on October 1 under a narrower federal definition of who qualifies. Starting January 1, 2027, adults in the expansion population must document 80 hours a month of work to keep coverage, even though roughly 70 percent of Washington adults on Medicaid already work.
Financial Impacts
Medicaid payments to Washington hospitals are projected to fall by $6.2 billion through 2035. In the individual market, enhanced premium tax credits expired at the end of 2025, premiums rose 21 percent this year, and insurers have requested another 22 percent for 2027. All of it lands on a budget that was already short. Lawmakers closed a $2.3 billion gap in 2026 and expect another next session.
Legislative Response
On September 1, 2026, Sen. Marcus Riccelli (D-Spokane), Sen. June Robinson (D-Everett), and other Democratic lawmakers convened the FA2IR Health Summit to discuss health care access and affordability following federal changes under H.R. 1. Washington Retail attended alongside other industry associations, agencies, hospitals, insurers, labor, advocacy groups, and select employers. Organizers indicated the effort will continue through the fall and inform legislation in the 2027 session.
Implications For Retailers
Employer health benefit costs are projected to rise about 9 percent in 2027, the fourth consecutive year of near double-digit growth, and small group renewal rates requested for 2027 range from 8 to 20 percent. Beginning in 2027, employers should also anticipate employment verification requests tied to Medicaid work requirement compliance, which will fall to payroll and store management. Part-time and seasonal positions carry the highest risk of verification problems because of variable scheduling. Rising household spending on premiums and out-of-pocket costs may also affect discretionary income.
Washington Retail Association will continue to monitor this issue and provide updates to members.
