In This Week’s Update:

• State Breakdown of Medicaid Budget Proposals
• SHVS Webinar: Proposed Changes to ACA Policies
• Addressing Root Causes of Childhood Chronic Disease
• Medicaid’s Role in Addressing Mental Health and Substance-Use Disorder Challenges
• Food and Drug Administration Efforts to Lower Prescription Drug Prices
• State updates: CA, CO, CT, DC, IA, ID, MA, MD, ME, MI, MN, NJ, NM, NY, OK, OR, PA, RI, VA, VT & WA

State Breakdown of Medicaid Budget Proposals
Last week, State Health and Value Strategies (SHVS) published an updated toolkit describing 10-year expenditure and enrollment estimates for select Medicaid provisions included in the House budget bill. The toolkit consists of a written analysis and an accompanying Excel workbook. Also last week, SHVS hosted the first webinar in a two-part series on the reconciliation bill, which highlighted the proposed changes in the legislation to Medicaid eligibility, payment and financing, and coverage. The webinar slides and a recording are available.

Addressing Root Causes of Childhood Chronic Disease 
The Make America Healthy Again Commission released a new report offering a foundation for the policy interventions, institutional reforms, and societal shifts needed to address the root causes of deteriorating child health. Framed as a call to action, the report identifies four potential drivers of the rise in childhood chronic diseases: poor diet, aggregation of environmental chemicals, lack of physical activity and chronic stress, and overmedicalization. The report identifies several next steps to close critical research gaps and guide efforts to better combat childhood chronic disease including: expanding the NIH-CMS autism data initiative into a broader, secure system linking claims, EHRs, and environmental inputs to study childhood chronic diseases; and creating a task force to apply Al and machine learning to federal health and nutrition datasets for early detection of harmful exposures and childhood chronic disease trends. 

Medicaid’s Role in Addressing Mental Health and Substance-Use Disorder Challenges
Since its inception, Medicaid has played a central role in expanding access to mental health and substance-use disorder (SUD) services through a federal-state partnership. Yet, it remains a work in progress due to significant state-level variability, funding challenges, and structural barriers. The Milbank Quarterly’s special issue authored by the National Association of Medicaid Directors explores how gaps in mental health/SUD coverage stem from the absence of a federally mandated benefit, budget constraints, workforce shortages, and the legacy of siloed health and human services systems. It also examines how Medicaid’s flexibility has enabled states and territories to pilot innovative, locally tailored care models. The paper highlights both the promise and limitations of Medicaid’s evolving role, calling for greater investment, stronger interagency collaboration, and continued research to improve access, integration, and outcomes for individuals with mental health conditions and SUD.

Food and Drug Administration Efforts to Lower Prescription Drug Prices
The U.S. Food and Drug Administration (FDA) has announced new measures to enhance the Section 804 Importation Program, which allows states and tribal governments to import certain prescription drugs from Canada in an effort to lower costs for American consumers without compromising safety. These enhancements include offering pre-review consultations, streamlining the cost savings analysis, and creating a user-friendly proposal development tool. Aimed at reducing the burden on states and improving proposal quality, the updates are in response to the Trump Administration’s Executive Order Lowering Drug Prices by Once Again Putting Americans First. The FDA plans to meet with interested states this fall to discuss these changes and gather feedback.

• California – Governor Newsom announced new figures from the state demonstrating the impact of the House reconciliation bill, which could result in up to 3.4 million Californians losing their health coverage and put more than an estimated $30 billion in federal funding at risk–”gutting the foundation of California’s healthcare safety net” SHVS has updated its expert perspective tracking state estimates of the impacts of proposed federal changes to Medicaid.
• Colorado – The Colorado Department of Health Care Policy & Financing released an updated fact sheet with estimates of the impact of federal Medicaid reductions. The state will continue to update the fact sheet as the bill progresses through the Senate.
• Connecticut
  • Governor Ned Lamont announced that he has signed a declaration enabling the Connecticut General Assembly to adopt legislation appropriating the funding necessary to keep Medicaid fully funded for the remainder of the 2025 fiscal year. This is the first time a declaration of this kind has been issued since 2007, when Governor M. Jodi Rell signed a similar declaration. To contain costs, the announcement notes that Governor Lamont has proposed repealing the GLP-1s for weight loss only and that the Department of Social Services also plans to provide stronger oversight of pharmacies to ensure patients receive the medication they need, without waste.
  • Governor Ned Lamont announced that more than 100,000 residents will receive notice that some or all of their medical debt has been eliminated under the second round of the state’s medical debt relief initiative. In this round $575,000 in American Rescue Plan Act funding was leveraged to eliminate more than $100 million. As a reminder, SHVS has an expert perspective which tracks state efforts to cancel medical debt and prohibit medical debt reporting to credit agencies.
• Iowa – Iowa submitted a request to extend the Iowa Wellness Plan section 1115 demonstration to continue providing coverage to the new adult group, and to continue demonstration elements including premiums, healthy behaviors, a waiver of non-emergency medical transportation, and a waiver of retroactive eligibility for certain enrollees. The demonstration also provides dental benefits for adults and children through a managed care delivery system known as a Prepaid Ambulatory Health Plan.
• Maryland – Governor Wes Moore signed legislation establishing the Maryland Health Insurance Coverage Protection Commission to monitor and assess the impact of potential and actual federal changes to healthcare programs, and to provide recommendations for state and local action to protect access to coverage.
• Massachusetts – Governor Maura Healey announced her administration is taking action to control health costs for patients. Commissioner of Insurance Michael Coljouw issued regulatory guidance that requires insurance companies to limit the growth of deductibles and co-pays at the rate of medical inflation, effective January 2026. This effort is the result of legislation signed this year that increased the Commissioner’s consideration of affordability during a review of the merged market.
• New York
  • Governor Kathy Hochul announced new figures from the state on the impact of the House budget bill, estimated to result in a $13.5 billion loss annually for New Yorkers and the healthcare economy. The state has also released a congressional district breakdown of anticipated funding losses.
  • New York submitted an amendment request to its New York Medicaid Redesign Team section 1115(a) demonstration. The amendment would authorize an 1115 demonstration program that would become the state’s new Medicaid Buy-In Program for Working People with Disabilities, to help more working individuals with disabilities qualify for Medicaid.
• Oklahoma – Oklahoma’s HB1512 became law without the Governor’s signature, authorizing the Oklahoma Insurance Commissioner the authority to create and manage a State-Based Marketplace and to apply for a section 1332 waiver.
• Pennsylvania – The Pennsylvania Insurance Department joined the Department of Health, the Department of Human Services, and the Department of Drug and Alcohol Programs to launch a new survey to identify challenges and questions women have about their health insurance benefits, and to remind women about the importance of access to preventive health services.
• Virginia – Governor Glenn Youngkin highlighted steps taken to improve maternal mental health in Virginia since he came into office, including implementing the “Right Help, Right Now” behavioral health transformation plan, Executive Order 32 Re-establishing the Maternal Health Data and Quality Measures Task Force, extending postpartum Medicaid coverage, and providing $2.5 million to fund Perinatal Health Hub Pilot Programs.
• Washington – The Washington Health Benefit Exchange released a synopsis of recent state budget and policy actions that impact the Marketplace, including funding for: Cascade Care Savings–the state’s premium assistance program, expanded language access, development of eligibility and enrollment tools, development of facilitated enrollment capabilities, and a proviso for a state only program for immigrant coverage was funded in anticipation of CMS withdrawing the state’s section 1332 waiver.
• CA, CO, CT, MI, MN, NJ, NM, NY, OR & WA – Governors in several states (California, Colorado, Connecticut, Michigan, Minnesota, New Jersey, New Mexico, New York, & Washington) issued statements about the passage of the House reconciliation bill and how the provisions will cut funding for state Medicaid programs and reduce enrollment. Oregon’s State Treasurer and New Jersey’s Human Services Commissioner issued similar statements.
• CA, CO, CT, DC, ID, MA, MD, ME, MN, NJ, NM, NY, OR, PA, RI, VA, VT & WA – Leadership of State-Based Marketplaces in 18 states sent a letter to the House, describing how the House budget bill will severely impact the ability of millions of Americans to access affordable health coverage. Additionally, Covered California issued a statement on the proposed health provisions in the House reconciliation bill and the impact of the expiration of the enhanced tax credits.