In This Week’s Update:

• How States Can Better Protect Residents Against Medical Debt
• Analyzing Federal Policy Changes Impact on Hospitals
• Healthcare Loopholes Enabling Financialization
• State Resources for Medicaid & CHIP
• State updates: AZ, MA, ME, MO, NC, NJ, NM, NV, PA, VA & VT

How States Can Better Protect Residents Against Medical Debt
A Commonwealth Fund issue brief examines gaps in state policies designed to protect patients from the financial burden of medical debt, noting weak oversight on compliance. Many financial assistance programs exclude vulnerable populations, while application processes and limited protections against nonhospital medical bills leave many without meaningful support.

Analyzing Federal Policy Changes Impact on Hospitals
An Urban Institute report describes how the impact of changes to Medicaid, Affordable Care Act Marketplace coverage, and immigration policy will vary across hospitals. Rural and Medicaid-dependent hospitals will face the greatest risk due to higher financial vulnerability and greater reliance on public insurance programs. While the phased implementation of these policies gives hospitals and states time to adapt, evolving federal guidance and court rulings may create additional challenges.

Healthcare Loopholes Enabling Financialization
A Century Foundation report examines how the complexity of the U.S. healthcare system creates loopholes that consolidated corporations can exploit for profit. The report points to rising consolidation and private equity ownership as a driver of these loopholes and argues that federal and state officials could and should close many of them.

State Resources for Medicaid & CHIP
Last week, the Centers for Medicare & Medicaid Services (CMS) released two resources for states: 

• A state tool outlining policy, operational, and system actions to aid implementation of H.R. 1 changes to non-citizen coverage. Beginning October 1, 2026, federal funding for Medicaid and CHIP will only be available for a narrow group of non-citizens.
  • Related resource: State Health & Value Strategies published an FAQ on the H.R. 1 changes to non-citizen coverage.
• The State Medicaid and CHIP Applied Behavior Analysis Toolkit to help state Medicaid and CHIP agencies address growing concerns about increasing expenditures, inconsistent clinical practices, and fraud schemes targeting autism services.

State updates: AZ, MA, ME, MO, NC, NJ, NM, NV, PA, VA & VT

• Arizona has erased more than $1 billion of medical debt from residents; to date nearly 671,000 residents have received relief through this effort. The Arizona Health Care Cost Containment System released four requests for grant applications: the Rural Health Innovative Care Pilot Program and Technical Assistance for Operational & Fiscal Performance, Adopt Shared Services Consortiums and Expansion of Mobile Digital Services, Training & Recruitment, and Prevention Programs under the state’s Rural Health Transformation (RHT) Program.
• Maine‘s Department of Health and Human Services is investing $190 million in the first year of its RHT Program, including $12 million in partnership with the University of New England’s Shaw Institute for Public and Planetary Health and $30 million to help strengthen the long-term financial health and sustainability of rural hospitals.
• Massachusetts‘ Health Care Affordability Working Group released recommendations to provide a roadmap to target significant drivers of healthcare costs. In response, the governor signed an executive order directing MassHealth to increase investments in primary care to 12% of total medical spending by the end of 2028. Nine health and dental insurance carriers are required to return $14.5 million to hundreds of thousands of residents through rebates after failing to meet the state’s Dental Loss Ratio standard. Massachusetts is the first state to require and enforce dental insurance rebates.
• Missouri’s Department of Social Services (DSS) is partnering to expand Mobile Integrated Healthcare and Community Paramedicine to connect the Office of Rural Health and Primary Care with the Emergency Medical Services Association. DSS also released a bulletin encouraging residents to stay informed about federal changes affecting public assistance programs through official DSS communications and by visiting the department’s H.R. 1 website.
• Nevada‘s Health Authority made major progress under its settlement agreement with the U.S. Department of Justice, reporting a sharp drop in youth institutional placements and a shift toward community-based care. Building on this progress, Nevada Medicaid is launching a short-term Residential Rehabilitative Mental Health Care model, supporting youth and adults with serious behavioral health needs in home-like, community-based settings​.
• New Jersey’s governor is investing $83 million in the first round of RHT Program grant awards in projects that strengthen healthcare access and improve health outcomes for rural residents.
• New Mexico‘s governor is awarding 41 rural healthcare providers and facilities a combined $50 million from the Rural Health Care Delivery Fund to sustain providers and prevent facility closures.
• North Carolina’s Department of Health and Human Services formed the NC RHT Program’s Advisory Committee, which includes more than 40 members representing community organizations, healthcare providers, elected officials, and other partners that will help guide the state’s work in improving access to care in rural areas.
• Pennsylvania‘s governor met with the Behavioral Health Council and Advisory Committee to unveil a statewide action plan for behavioral health. The Council examined the current state of Pennsylvania’s behavioral healthcare system, offering 41 recommendations to improve access to care and strengthen support for residents. The Department of Human Services announced that nearly $27 million is available through two RHT Program funding opportunities to help rural healthcare providers invest in technology that improves patient experience and care.
• Virginia received CMS approval to renew the “Building and Transforming Coverage, Services, and Supports for a Healthier Virginia” section 1115 demonstration, which provides federal funding for services to eligible enrollees for substance-use disorder treatment and serious mental illness in institutions for mental diseases, extends Medicaid eligibility for former foster care youth under age 26 currently residing in Virginia who aged out in another state or tribe, and ends the High Needs Support component of the demonstration.
• Vermont‘s Department of Health Access released a communications toolkit for the state’s Medicaid changes, designed to help enrollees understand upcoming federal changes and know what actions they may need to take.