States incorporated significant healthcare reforms into budget bills as sessions concluded and the new fiscal year began July 1st. California's $321 billion budget freezes Medicaid enrollment for undocumented adults starting 2026, while Minnesota eliminated coverage for approximately 15,000 undocumented adults. Florida boosted Medicaid rates for long-term care facilities by $286 million, Ohio established automatic Medicaid expansion termination if federal match drops below 90%, and Wisconsin raised hospital provider taxes to generate $1.5 billion in additional Medicaid funding.

Connecticut Governor Lamont signed comprehensive healthcare reform including mental health parity reporting and step therapy prohibitions. Iowa and Montana submitted federal waivers for Medicaid work requirements, seeking 100 and 80 monthly hours respectively. Oklahoma's Governor Stitt issued an executive order implementing "Make America Healthy Again" initiatives, including SNAP waivers to exclude soft drinks and ending public water fluoridation endorsements. Maine's legislature passed PDAB expansion legislation, but Governor Mills postponed her decision until January 2026.

Legislative sessions concluded across most states this past month, with significant healthcare legislation passing nationwide. Texas enacted bills expanding healthcare cost disclosure, modifying prior authorization, and clarifying abortion exceptions. Oklahoma's legislature overrode gubernatorial vetoes on 340B, scope of practice, and breast cancer imaging coverage. Connecticut's budget included provisions creating CDC/FDA advisory committees, codifying fluoride requirements, and limiting generic drug price increases to inflation rates.

Twenty-seven bills in fourteen states have introduced Medicaid work requirements in 2025, with Idaho, Indiana, Kentucky, and Montana enacting legislation. The House-passed reconciliation bill mandates 80-hour monthly work requirements for Medicaid expansion populations by December 2026. Five states have submitted federal waivers for approval, while Georgia seeks renewal of its existing program. The Trump administration's support has emboldened state action on this budget-cutting measure.

Arkansas faces a third lawsuit challenging its law prohibiting PBMs from owning pharmacies, with the PBM trade group PCMA joining CVS and Express Scripts in federal court challenges. Louisiana scrapped similar legislation in favor of a study bill after last-minute opposition, prompting an attorney general investigation into CVS's text messaging campaign. California and Illinois are advancing PBM reform to address budget deficits, with both states banning spread pricing and requiring rebate pass-throughs on state health plans.

The U.S. Senate is reviewing budget reconciliation legislation that would cut federal Medicaid funding to states by $800 billion over 10 years. Key provisions include work requirements, more frequent eligibility checks, and provider tax caps. The CBO estimates 7.6-10.3 million people could lose coverage, forcing states to choose between cutting services or finding alternative funding.

Following a 2024 federal court decision finding EPA's fluoride levels pose unreasonable risks to children's IQ, several states are banning water fluoridation. Utah became the first state to enact a statewide ban in March, followed by Florida in May. Additional legislation is pending in Nebraska and Louisiana. Meanwhile, over sixty communities serving 9 million people have ended fluoridation programs, despite continued support from dental and public health organizations.

State legislatures remain deeply divided on reproductive health policy in 2025. Following 2024 ballot measure victories for abortion protections in seven states, Republican lawmakers in Montana and Missouri are pushing counter-measures. States are clarifying emergency abortion exceptions amid legal challenges, while blue states codify EMTALA protections. Medication abortion faces ongoing restrictions in red states and protective measures in blue states.

States Expand Prescription Drug Affordability Boards to Combat Rising Costs

Eleven states have established Prescription Drug Affordability Boards (PDABs) to address prescription drug costs, with four states authorizing upper payment limits (UPLs) though none implemented yet. Virginia's governor vetoed PDAB legislation for the second consecutive year, while Maryland expanded UPL authority. Colorado's PDAB survived a constitutional challenge from a drug manufacturer, with the court dismissing the case in March 2025.

The ruling is significant as it maintains the viability of PDABs and UPLs as a policy solution for states to address prescription drug costs. PDABs in Colorado, Maryland, Minnesota, and Washington have UPL authority, and as they move through the process of implementing UPLs, other states will be monitoring the impact and whether it is an effective approach to lower prices for consumers.

As legislative sessions wind down across the country, attention turns to the executive branch as governors make decisions on bills passed by the legislature. In the past month, various governors have taken action on significant healthcare legislation by signing, vetoing, or allowing bills to become law.

Legislation we’re watching this month, including Certificate of Need in Mississippi, facility fees in Oregon, Medicaid reform in Indiana, and more.

The Idaho Governor signed into law a bill that makes substantive changes to the state’s Medicaid program. HB 345 was a negotiated compromise between legislative leadership that reforms both eligibility and coverage delivery for the Medicaid program.

While the COVID-19 vaccines were the first mRNA technologies approved by the FDA, NIH scientists have been studying the technology since the 1960s. Now, mRNA technology is being explored for other diseases like cancer and the flu. Due to controversies stemming from the COVID pandemic response, including the vaccines, conservative legislators in 12 states have introduced legislation limiting mRNA vaccine technology.

Virginia and Utah wrapped up their sessions with significant healthcare legislation. Both states enrolled legislation that stands to have significant influences to the state of healthcare delivery and coverage and public health.

Legislation we’re watching this month, including Medicaid policy activity in several states, a bill to eliminate the New Hampshire Vaccine Association, and more.

Recognizing the potential long-term benefits for enrollees’ cost of coverage, a number of state Medicaid and employee health plans initiated coverage of GLP-1s for weight loss purposes. Only Arkansas, California, Maryland, New Mexico, Pennsylvania, and Texas have introduced legislation mandating coverage in 2025 to date.

So far in 2025, 21 bills in 11 states have been introduced that would require some community engagement in order to receive Medicaid benefits. Despite legislative attempts at implementing work requirements, it may be possible for some states to bypass the legislature altogether.

As states and the federal government look for ways to cut spending, an obvious place to look is one of the largest budget items for all jurisdictions: Medicaid. The addition of work requirements for recipients has been a perennial (though so far unsuccessful), option for budget conscious legislators. So far in 2025, 12 bills in 7 states have been introduced that would require some community engagement in order to receive Medicaid benefits.

Over the past month, arguably no Governor and Legislature have been as proactive in healthcare reform as newly elected Indiana Gov. Mike Braun (R) and Indiana’s General Assembly. In late January, the Governor issued six executive orders pertaining to healthcare access, affordability and transparency.