National
ASPE Releases Report on Impacts of Medicaid State Provider Tax Laws on ESI Premiums. Last Tuesday, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) released a report on how state provider tax laws affect employer-sponsored insurance (ESI) premiums. The report details that, on average, state provider tax laws taxed hospitals on up to 3.5% of net patient revenue, increasing ESI premiums by 1.5 to 1.7 percent plus spillover effects in interstate markets for provider resources. Additionally, the report noted that as of 2026, 47 states impose hospital provider taxes, 37 of which exceed 3.5 percent of net patient revenue. Accordingly, the report suggests that the state provider tax limits imposed by H.R.1, which lower the tax-safe harbor threshold from 6 to 3.5 percent, could reduce ESI premiums by 2.2 to 2.5 percent by 2032, potentially increasing wages by 0.5 to 0.6 percent for households with ESI. ASPE concluded that reducing provider taxes would reduce healthcare costs, suggesting policymakers and analysts consider the taxes’ direct impact on budgetmaking and indirect effects on ESI, the insurance market, and households.
CMS Proposes Stricter Eligibility Checks for Health Insurance Exchange Subsidies. This past Friday, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule (CMS 9873-P) that would implement stricter eligibility verifications for individuals applying for health insurance exchange subsidies. The regulation implements requirements specified under H.R. 1. As proposed, the rule would require enrollees applying for premium tax credits and cost-sharing reductions to meet a set of eligibility criteria verified by exchanges before receiving benefits. The criteria would cover household income, family size, citizenship status, other enrollment eligibility, and place of residence. The rule also includes provisions related to an open enrollment verification period, annual and mid-year eligibility redeterminations, timeline requirements for states transitioning to a state-based exchange, binder payments, verification exemptions during special enrollment periods, and plan selection requirements. CMS positions the policy as a continuation of its efforts to prevent fraud, waste, and abuse. The rule is scheduled to be published on October 27, after which public comments may be submitted for 30 days.
Alaska
Department of Health Awards $249 Million to Complete First Year RHTP Funding. This past Thursday, the Centers for Medicare and Medicaid Services (CMS) announced that the Alaska Department of Health awarded $249 million in Rural Health Transformation Program (RHTP) grants across 254 projects. The funding amounts span six initiatives:
Expanding behavioral health, pharmacy, dental, specialty, and primary care access
Modernizing health technology and telehealth for village clinics
Implementing value-based care and strengthening financial sustainability
Supporting rural healthcare workforce training and recruitment
Expanding maternal health and child health services
Improving care coordination, community health, and preventive care
These investments complete Alaska’s overall first-year funding award. Applications for the Year 2 Fall 2026 funding cycle may be submitted through October 28; DOH expects to begin notifying applicants in December 2026, and releasing awards after January 1, 2027.
California
CMS Defers $1.2 Billion in Medicaid Payments. Last Tuesday, Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz (R) announced the agency would defer an additional $1.2 billion in Medicaid payments to California, citing concerns about the growth of the state’s In-Home Supportive Services program. Dr. Oz said the program had grown 24% over the past three years, twice the national average. The deferral applies to Medicaid payments for personal care services; a spokesperson for Governor Gavin Newsom (D) said that while the total deferral is $1.2 billion, only $1.1 billion relates to in-home care. Notably, CMS previously deferred $1.3 billion in payments to California in May, which was reported as the largest such deferral in its history.
Florida
Physicians Challenge State’s Proposed Changes to School Vaccine Requirements. Recently, the Florida Academy of Family Physicians and three individuals challenged proposed revisions to the state’s immunization requirements that would remove requirements for children attending school and daycare to be vaccinated against hepatitis B, varicella (chickenpox), Haemophilus influenzae type b (Hib), and pneumococcal conjugate. The plaintiffs allege the Florida Department of Health (DOH) did not follow proper rulemaking procedures and lacks the authority to eliminate the requirements. Accordingly, the plaintiffs are requesting an administrative hearing and a determination invalidating the proposed rule, along with relief to cover their attorney fees. Current law allows DOH to require vaccines for communicable diseases not listed in statute. While the plaintiffs noted that DOH proposed eliminating the requirements despite no new medical or scientific evidence or data calling into question the vaccines’ necessity, safety, or efficacy, Surgeon General Dr. Joseph Ladapo said during a recent public hearing the changes were meant to protect parental rights.
Illinois
Governor Pritzker Announces $1.4 Billion in Medical Debt Erased in Two Years. Recently, Governor J.B. Pritzker (D) announced that the Illinois Medical Debt Relief program erased $1.4 billion in medical debt for almost 700,000 residents across all counties, surpassing the original goal by $400 million. Notably, the state spent less than $10 million to accomplish this relief, partnering with a nonprofit that buys and relieves medical debt. Residents with a household income under 400% of the federal poverty level or medical debt of at least 5% of their household income are automatically eligible for the program. The statewide program follows Cook County as the first local government to use federal relief funds to erase medical debt. Together, the program and the state have eliminated $2.4 billion in medical debt for nearly 1.5 million residents. Other states have pursued similar programs, including Kentucky, which last month established a statewide program to erase $250 million in debt through an executive order (2026-600).
Indiana
Family and Social Services Administration Requests Transition of Medicaid Expansion Population to Section 1115 Demonstration. Last Tuesday, the Centers for Medicare & Medicaid Services (CMS) announced that the Indiana Family and Social Services Administration (FSSA) submitted a request to transition its Medicaid expansion population from the state plan to a five-year Section 1115 demonstration waiver, entitled Healthy Indiana Plan (HIP) 3.0. Currently, HIP provides Medicaid coverage for adults ages 19 to 64 through managed care organizations (MCOs). This request follows program integrity and sustainability efforts in SB 2 (2025), which required HIP to be authorized under a Section 1115 waiver and to operate with state funds or other available funding. The waiver would simplify benefit design into a single package and reintroduce member cost-sharing, with copayments capped at 5% of a member’s quarterly income. Beneficiaries who complete preventive care and chronic disease management activities would be eligible for reduced copayments. The public comment period is open until November 19, 2026. If approved, FSSA would begin implementing HIP 3.0 on October 1, 2027, so the program is operational for the 2028 plan year. This timeline exempts implementing copayments, which FSSA seeks to adopt as soon as practicable in accordance with state law.
Iowa
Attorney General Bird Files Lawsuit over Generative AI Chatbot Safety Concerns. Recently, Attorney General Brenna Bird (R) announced she is suing OpenAI over safety concerns with ChatGPT. The lawsuit alleges several behavioral health and medical concerns, claiming ChatGPT coaches users to commit suicide and harm others, offers dangerous medical advice, encourages paranoia, and promotes unhealthy behaviors. AG Bird further argues that OpenAI misrepresented the safety and appropriateness for teenage users. As a result, the lawsuit alleges violations of Iowa’s Consumer Fraud Act and seeks several penalties, remedies, and injunctions against the defendants. Several other states have filed similar separate lawsuits, including Arkansas, Arizona, Idaho, Kansas, Montana, Nebraska, and West Virginia.
New Hampshire
Executive Council Approves Digital System Purchase for Medicaid Work Requirements. Last Wednesday, the New Hampshire Executive Council met and approved a contract between New Hampshire Employment Security and a vendor to upgrade its job-matching system to prepare for implementing Medicaid community engagement requirements. The current system matches employers with job candidates. The planned improvements would allow the system to enroll people in Medicaid and track and report work hours to the Department of Health and Human Services. Employment Security Commissioner Rich Lavers said he expects the system to become operational before the requirements take effect on January 1, 2027. The New Hampshire Fiscal Policy Institute estimates that 23,000 to 29,000 adults out of the approximate expansion population of 50,000 could be enrolled in expanded Medicaid by 2028. However, council member Liot Hill (D) felt the estimate may overstate the policy’s impact.
Vermont
Agency of Human Services Proposes Rule to Eliminate Prior Authorization for Medicaid Home Health. Recently, the Vermont Agency of Human Services published a proposed rule (26PO32) to eliminate prior authorization requirements for Medicaid home health care and to allow for coverage when it is deemed medically necessary. The agency is scheduled to hold an in-person and virtual hearing on the proposed changes on November 9, 2026. Additionally, the public comment deadline runs through November 16, 2026.
West Virginia
CON Repeal Faces Opposition from Healthcare Providers and Legislators. Last Tuesday, panelists discussed their opinions on repealing West Virginia’s Certificate of Need (CON) law during the West Virginia Directors of Senior and Community Services annual conference. Governor Patrick Morrisey (R) has pushed for the measure for several years; however, panelists were not keen on the change. Senator Mike Oliverio (R-Magnolia) said the CON law prevented duplicative costs and cited concerns about health systems' ability to compete with out-of-state hospitals. Delegate Geno Chiarelli (R-Magnolia) did not view the repeal as a priority, saying prior authorization and provider credentialing are greater concerns for healthcare professionals. Other health system directors supported keeping the law in the face of expected Medicaid reimbursement cuts and coverage losses. However, Christy Mills, executive director of the Lewis County Senior Center, noted West Virginia needed a methodology change to allow for more in-home care agencies.