State Health Policy Action We're Watching in September 2026
Key Takeaways
- Arkansas is seeking a two-year extension of ARHOME, its Section 1115 waiver program covering more than 215,000 Medicaid expansion enrollees, with a backup plan to transition participants to fee-for-service coverage if federal approval isn't granted by January 2027.
- A federal judge dismissed a drug manufacturer's challenge to Colorado's 340B contract pharmacy protection law, ruling that the state law regulates drug distribution rather than pricing and doesn't conflict with federal requirements.
- A federal court initially found Idaho's near-total abortion ban unconstitutional for failing to protect maternal health, though the ruling was later narrowed to apply only to the plaintiff physician while the state pursues an appeal.
- Indiana released an RFP to reprocure its Medicaid managed care programs covering approximately 1.5 million beneficiaries, with new contracts set to begin in January 2029 and a requirement that winning bidders support care integration for dual-eligible enrollees.
Arkansas Medicaid Waiver Extension and Coverage Implications
On August 17, the Arkansas Legislative Council's Hospital, Medicaid, and Developmental Disabilities Study Subcommittee met with Arkansas Secretary of Human Services Janet Mann. During the meeting, Secretary Mann stated she was confident the Centers for Medicare & Medicaid Services (CMS) would grant the state's request for a two-year extension of ARHOME, the Section 1115 waiver program covering Arkansas' Medicaid expansion population. Mann noted she expects the more than 215,000 enrollees to retain some form of health coverage, and if CMS denies the extension request, all ARHOME participants could switch to fee-for-service coverage on January 1, 2027.
Federal Court Decisions on 340B Drug Pricing Laws in Colorado and Beyond
On August 31, a federal judge granted Colorado's motion to dismiss a drug manufacturer's challenge to its 340B contract pharmacy protection law (SB 71). Judge Phillip Brimmer used similar reasoning to a recent dismissal in South Dakota, finding SB 71 is not preempted by Section 340B or federal patent law because it regulates drug distribution, not price. He also found the law does not violate the Contracts Clause or Takings Clause because it does not affect the manufacturer's Pharmaceutical Pricing Agreement terms and the manufacturer voluntarily participates in the 340B program.
Looking ahead, the 10th Circuit Court is scheduled to hear oral arguments to appeal a preliminary injunction of Oklahoma's 340B law on September 17, 2026.
Idaho Abortion Ban Ruling and Upcoming Ballot Measure
On August 20, a federal judge found Idaho's near-total abortion ban unconstitutional because it did not allow abortions to protect a mother's health or address a risk of self-harm. Notably, Judge Barry Lynn Winmill's ruling was the first to find the Constitution includes a right to abortion access in certain situations since the U.S. Supreme Court's decision in Dobbs v. Jackson in 2022. Attorney General Raúl Labrador (R) immediately requested to appeal the ruling, arguing Winmill lacked the authority to issue a universal injunction. Judge Winmill agreed, and the next week he narrowed his decision to only apply to abortions performed by the plaintiff, Dr. Stacy Seyb. In November, Idaho voters will decide on a ballot measure to overturn the state's abortion ban.
Indiana Medicaid Managed Care Procurement and Dual Eligible Integration
On August 27, the Indiana Family and Social Services Administration released a request for proposals to reprocure the state's four managed care programs (Hoosier Healthwise, Healthy Indiana Plan, Hoosier Care Connect, and Indiana PathWays for Aging), covering approximately 1.5 million beneficiaries. The state intends to award all four Medicaid programs to the same awarded health plans and requires successful bidders to support care integration for Medicare-Medicaid dual enrollees throughout the contract term and operate a Dual Eligible Special Needs Plan. Proposals are due November 6, 2026, with contracts beginning January 1, 2029, and running for four years, with two optional one-year extensions.
Legal Challenges to Mifepristone Access in Texas and Other States
On August 30, a federal judge in Texas granted the U.S. Food and Drug Administration's (FDA) request to stay a lawsuit seeking to reverse Mifepristone access until the agency completes its safety review of the drug or December 1, 2026, whichever comes first. If a judge ruled in favor of Texas Attorney General Ken Paxton's (R) and Florida Attorney General James Uthmeier's (R) lawsuit, mifepristone would no longer be available in any state, regardless of abortion laws. Moreover, ongoing cases in Louisiana and Missouri challenge mifepristone access nationwide. While a Fifth Circuit panel held oral arguments on September 9 regarding Louisiana's request to stay the FDA's decision to remove in-person dispensing requirements for the drug, it has yet to issue a ruling.
Track Health Care Policy
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Section 1115 Waiver
A Section 1115 waiver allows states to test new approaches in their Medicaid programs that differ from federal requirements. These demonstration projects must be budget neutral and promote Medicaid objectives. Arkansas uses a Section 1115 waiver for ARHOME, its Medicaid expansion program covering more than 215,000 enrollees.
340B Drug Pricing Program
The 340B program requires drug manufacturers to provide outpatient drugs at discounted prices to eligible health care organizations that serve vulnerable populations. Participating entities can use contract pharmacies to dispense these discounted drugs. Recent state laws, including Colorado's SB 71, protect the ability of covered entities to use contract pharmacies after some manufacturers attempted to restrict this practice.
Dual Eligible Special Needs Plan
A Dual Eligible Special Needs Plan (D-SNP) is a type of Medicare Advantage plan designed specifically for individuals who qualify for both Medicare and Medicaid. These plans coordinate benefits across both programs to provide integrated care. Indiana's new Medicaid managed care RFP requires winning bidders to operate a D-SNP to support care integration for dual-eligible enrollees.
Frequently Asked Questions
What happens to Arkansas ARHOME Medicaid expansion enrollees if CMS denies the waiver extension?
If CMS denies Arkansas' request for a two-year ARHOME extension, all participants could transition to fee-for-service Medicaid coverage starting January 1, 2027. Arkansas Secretary of Human Services Janet Mann stated she expects the more than 215,000 enrollees to retain some form of health coverage regardless of the extension decision.
Did the federal court uphold Colorado's 340B contract pharmacy protection law SB 71?
Yes, on August 31, 2026, a federal judge granted Colorado's motion to dismiss a drug manufacturer's challenge to SB 71. Judge Phillip Brimmer ruled that the law is not preempted by Section 340B or federal patent law because it regulates drug distribution rather than price, and does not violate the Contracts Clause or Takings Clause.
What was the outcome of the Idaho abortion ban constitutional challenge in August 2026?
A federal judge initially found Idaho's near-total abortion ban unconstitutional for not allowing abortions to protect a mother's health or address risk of self-harm. However, Judge Barry Lynn Winmill subsequently narrowed his decision to apply only to abortions performed by the plaintiff, Dr. Stacy Seyb, after the Attorney General challenged his authority to issue a universal injunction.
What are the requirements for Indiana's Medicaid managed care RFP released in August 2026?
Indiana's RFP requires awarded health plans to manage all four Medicaid programs (Hoosier Healthwise, Healthy Indiana Plan, Hoosier Care Connect, and Indiana PathWays for Aging) covering approximately 1.5 million beneficiaries. Successful bidders must support care integration for Medicare-Medicaid dual enrollees and operate a Dual Eligible Special Needs Plan, with contracts beginning January 1, 2029.
What is the current status of the Texas lawsuit challenging nationwide mifepristone access?
On August 30, 2026, a federal judge granted the FDA's request to stay the lawsuit until the agency completes its safety review of mifepristone or December 1, 2026, whichever comes first. The lawsuit, filed by Texas Attorney General Ken Paxton and Florida Attorney General James Uthmeier, seeks to reverse mifepristone access nationwide regardless of individual state abortion laws.