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.

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.

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.

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.

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.