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.

Legislation we’re watching this month, including the creation of Prescription Drug Affordability Boards, a gender-affirming care barn in Kansas, private equity oversight in Connecticut and New York, and more.

Over the past two months, governors across the country have laid out key policy priorities for the next year in their State of the State addresses. This year, the majority of governors have made healthcare a key issue with several highlighting behavioral health, workforce, and affordability as priorities.  

During the 2024 state legislative sessions, 33 bills were enacted in 20 states related to the regulation of pharmacy benefit managers (PBMs). States used a variety of tactics, including spread pricing prohibitions, 340B pharmacies, patient steering and affiliated pharmacies, and mandates for increased reporting of PBM activities.

With rising prescription drug costs a concern for consumers, state legislatures have taken an array of actions to contain costs. In recent years the establishment of Prescription Drug Affordability Boards (PDABs) has emerged as a strategy across the country. Eleven states have established a PDAB or a similar drug cost control entity. PDABs in four states (Colorado, Maryland, Minnesota, and Washington) have the authority to set upper payment limits (UPLs) on prescription drugs they determine to be unaffordable after review.

In 2025, state lawmakers are expected to prioritize healthcare affordability and access, building on key legislative trends from this year. Here are our thoughts on key trends and issues from 2024 and how they might show up in state capitols next year.