Weekly StateVitals Update: Volume 76 (July 13, 2026)
National
15 States Sue Department of Education to Block School Mental Health Funding Cuts. Last Friday, Washington Attorney General Nick Brown (D) led a coalition of 15 states in filing a lawsuit against the U.S. Department of Education to prevent it from terminating school-based mental health grants. The attorneys general allege the Department is in violation of a December 2025 court order that prohibited it from discontinuing the grants and ordering the department to make new continuation decisions. The Department then issued a continuation of the grants through December 31, 2026, though it now seeks to terminate the grants altogether. At stake is a $1 billion program that issues grants to schools for them to hire and train mental health professionals. As it stands, the U.S. District Court for the Western District of Washington is set to review a motion for an expedited preliminary injunction on July 24. Along with Washington, the other states joining the lawsuit are California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, New Mexico, New York, Oregon, Rhode Island, and Wisconsin.
California
Governor Newsom Enacts Medi-Cal Fair Share Bill. Last Monday, Governor Gavin Newsom (D) signed SB 177, a Medicaid fair share bill. The bill requires the Department of Finance to present the Joint Legislative Budget Committee with one or more options for establishing an assessment on the state’s largest corporations for the taxpayer costs of their employees enrolled in the state’s Medicaid program, unless HR 1’s Medicaid program-related provisions are repealed. Regarding this requirement, the bill specifies that at least one option must include a premium paid by employers with at least 250 employees to offset the costs of employees enrolled in Medi-Cal who are not offered employer health coverage.
Colorado
Federal Judge Issues Preliminary Injunction on PDAB’s UPL for Enbrel. Recently, a federal judge in Colorado issued a preliminary injunction blocking the upper payment limit (UPL) set by Colorado’s Prescription Drug Affordability Board (PDAB) for Enbrel. The judge granted the preliminary injunction on the grounds that the UPL is likely preempted by federal patent law and rejected Colorado’s argument that the UPL only impacts downstream transactions rather than the drug's manufacturer directly. The ruling is a significant challenge to the legal foundation of UPLs and, if upheld, could significantly impact states’ ability to set UPLs on patented drugs and lessen other states' appetite for pursuing UPLs.
Idaho
Abortion Ballot Initiative Receives 108,000 Signatures. Recently, organizers submitted 108,000 signatures to place a proposed reproductive-rights initiative on the November ballot. Currently, Idaho has a near-total abortion ban, with exceptions for the life of the pregnant person and for rape and incest survivors during the first trimester, if they report the incident to law enforcement. The proposed initiative would enumerate rights for reproductive rights and privacy in medical decision-making and legalize abortion until fetal viability or in cases of medical emergency. Through a ballot initiative, residents can propose and decide whether to enact a new law through a majority vote in November. However, to qualify for the ballot, the initiative must have signatures from 6% of registered voters statewide, who must represent 6% of registered voters in 18 of the state’s legislative districts. As it stands, the Idaho Secretary of State’s Office has not yet confirmed whether the measure qualified for the November ballot.
Massachusetts
Governor Healy Signs $63.4 Billion Budget With HIV PrEP Coverage and Dental Service Benefit Cap. Last Thursday, Governor Maura Healey (D) enacted the Fiscal Year 2027 budget, appropriating $63.4 billion with notable health policy provisions. In particular, it adopts current federal law requiring health insurance coverage of all FDA-approved HIV pre-exposure prophylaxis (PrEP) medications without cost-sharing or prior authorization. Additionally, the budget bill authorizes MassHealth and the Health Safety Net to impose a $1,750 benefit cap on adult dental services. Moreover, the legislation authorizes the Executive Office of Health and Human Services to determine the extent to which to include federally-optional adult dental services within its covered services.
Missouri
Missouri Releases RFP to Provide Statewide Medicaid Managed Care Services. Recently, the Missouri Department of Social Services (DSS) released a request for proposal to provide statewide Medicaid managed care services within the MO HealthNet program. The procurement includes 3 General Plan contracts for major managed care eligibility groups, and one Specialty Plan contract for Show Me Health Kids, which covers children in state custody, adoption subsidy children, and children receiving private duty nursing services. DSS will hold a pre-proposal teleconference for the RFP on July 21, and proposals are due September 2. The state is expected to run readiness reviews from January 1, 2027, to March 30, 2027, with contracts running for one year with the option of four one-year renewals.
North Carolina
Governor Stein Signs $34 Billion Budget Fully Funding Medicaid and Repealing CON Laws. Last Tuesday, Governor Josh Stein (D) signed North Carolina’s budget (SB 257) into law, which fully funds Medicaid for the next fiscal year, appropriating over $1 billion to the program and an additional $333 million for a Medicaid Contingency Reserve. Along with the funding, the budget repeals certificate of need (CON) laws for inpatient rehabilitation services, facilities, and beds. Moreover, the budget strengthens oversight of several rapidly growing Medicaid services, requiring closed networks for peer support, research-based behavioral health treatment, and community support services. Applied behavioral analysis (ABA) therapy also faces new restrictions: providers must conduct ABA therapy assessments in person, prepaid health plans or the Department of Health and Human Services must approve service plans, and plans with over 16 hours of weekly therapy require more frequent reapproval.
Ohio
Governor DeWine Enacts Medicaid Fraud Prevention Bill. This past Tuesday, Governor Mike DeWine (R) signed SB 315 into law, which aims to strengthen the state’s Medicaid fraud prevention efforts through stricter electronic visit verification (EVV) requirements. In particular, the bill requires the Department of Medicaid to implement a process or system to obtain Global Positioning System (GPS) coordinates to verify nonemergency medical transportation services provided to Medicaid recipients. Additionally, the bill requires the Ohio medicaid director to submit an annual report on EVV utilization and compliance. Along with the EVV requirements, the bill also mandates prior authorization requirements on all therapeutic behavioral services provided under the medicaid program. Notably, this is not the first time Governor DeWine has considered EVV requirements; last year, he vetoed a budget provision requiring Medicaid claims to be paid even if EVV data was missing, and in May, he issued an executive order to expand EVV requirements and required the use of GPS.
Oregon
OHA Awards $97.1 Million in RHTP Funding. Last Tuesday, the Oregon Health Authority (OHA) awarded an additional $97.1 million in Rural Health Transformation Program (RHTP) funding aimed at improving healthcare access, strengthening the rural healthcare workforce, integrating data and technology usage, and building regional partnerships for long-term improvements. OHA is offering the awards through two funding pools: competitive Catalyst Award grants and Immediate Impact Awards. The Catalyst Award grants will distribute $80.1 million to 85 organizations for 103 projects on maternal health, child health, co-occurring mental health conditions and substance use disorder, aging in place, or chronic disease. The Immediate Impact Awards will distribute $17 million toward 33 projects for this year, expanding mobile health units, family medicine residency training programs, and nutritious food access. More information on the grants and the recipients can be found on OHA’s RHTP website.
Vermont
Governor Scott Issues Executive Order on Healthcare Affordability. This past Wednesday, Governor Phil Scott (R) signed Executive Order 05-26, directing state agencies to use their authority to improve healthcare affordability and prepare recommendations for the 2027 legislative session. In particular, the Executive Order specifies that it includes, but is not limited to, the following healthcare affordability provisions:
The Department of Financial Regulation (DFR) must develop a plan by December 31, 2026, to allow health insurers to develop rate incentives to not use tobacco products that are within 20% of the community rate.
The Department of Vermont Health Access (DVHA) and the Agency of Human Services, in collaboration with DFR, must prepare an application for an ACA State Innovation Waiver, which may explore options like a reinsurance pool by December 31, 2026, and propose legislation to state health committees by February 1, 2027.
DFR must review the statutory and regulatory framework governing Association Health Plans, Multiple Employer Welfare Arrangements, and other small employer health plans and recommend changes.
DFR, in consultation with DHVA and the Department of Taxes, must evaluate possible tax incentives, including those that expand affordability for small businesses, and propose recommendations.
The Green Mountain Care Board must utilize its existing authority to implement the reference-based pricing reforms required by Act 68 of 2025.
In his press release, Governor Scott expressed his interest in healthcare reform, noting it was time for the state to “... adopt practical reforms that have already proven successful in many other states.”
Wyoming
Health Department Releases RFP for $205 Million in RHTP Funding. Recently, the Wyoming Department of Health released its request for proposals (RFP) to implement changes under the state’s Rural Health Transformation Program (RHTP) application. The department released $205 million in funds, which applicants may use to create new post-graduate medical education positions, implement a state-wide telespecialist platform, support access to emergency medical services, and expand primary care and basic hospital services. The applications close by midnight on August 2. Once selected, participants will have to obligate the funding by October 30, 2026, and expend costs and activities by September 30, 2027.