HMA Weekly Roundup

Arkansas

Arkansas Governor Seeking to Reinstate Medicaid Work Requirements. Arkansas Times reported on January 16, 2025, that Arkansas Governor Sarah Sanders will pursue a reinstatement of Medicaid work requirements for able-bodied adults under the Arkansas Health and Opportunity for Me (ARHOME) expansion program. Sanders has also proposed a broader work requirement which would apply to able-bodied adults on traditional Medicaid, after a previous work requirement was blocked by federal courts.

California

California Representative Files Bill to Limit Medicaid Access for Undocumented Immigrants. The Sacramento Bee announced on January 22, 2025, that U.S. Representative Kevin Kiley (R-CA) has filed a bill to prohibit states from using either federal or state Medicaid funds to provide medical services to undocumented immigrants, with an exception for emergency medical services. Beginning January 1, 2024, California expanded Medicaid coverage to more than 700,000 undocumented individuals ages 26 to 49.

California Governor Declares State of Emergency, Implements Medi-Cal Flexibilities. The California Department of Health Care Services (DHCS) reported on January 17, 2025, that Governor Gavin Newsom has proclaimed a State of Emergency related to the Southern California wildfires and issued an Executive Order which implements key administrative flexibilities to protect Medicaid beneficiaries in affected regions of the state. These efforts include simplified Medi-Cal enrollment and renewal processes; waived requirements to access prescription medications and medical devices; behavioral health service flexibilities; and long-term services and supports flexibilities.

Colorado

Colorado Hospital Transparency Reports Reveal Higher Expenses, Narrower Profits in 2023. The Colorado Department of Health Care Policy & Financing released on January 16, 2025, mandatory hospital transparency reports, which revealed that patient revenues grew by 4.8 percent from 2022 to 2023, but hospitals had narrower operating profits in 2023 due to higher costs for labor expenses, the supply chain, and inflation growth. Most of the hospitals’ $1.5 billion in profits were concentrated in urban, non-profit tax-exempt hospitals, and an increasing number of critical access, rural hospitals, and Denver Health facilities saw negative profit margins. About one-third of Colorado hospitals saw negative profits in 2023.

Delaware

Delaware Launches New Payment Model for Children in Medicaid. Delaware Public Media reported on January 18, 2025, that the state of Delaware and Nemours Children’s Health launched a new payment model for the approximately 120,000 children in the state Medicaid program. The new model has payment incentives based on Nemours being able to keep children healthy and avoid hospital treatment, in lieu of reimbursing Nemours for treatment services.

Georgia

Georgia Seeks Five-year Extension of Pathways to Coverage Section 1115 Demonstration. The Georgia Department of Community Health announced on January 21, 2025, that it plans to submit an amendment to the Centers for Medicare & Medicaid Services (CMS) to extend its Pathways to Coverage Section 1115 demonstration by five years. Along with the extension, Georgia will request changes to the demonstration, including the removal of monthly qualifying activity reporting as a requirement for participation, and instead only require it at the initial eligibility determination and annual renewal. The state also seeks to add more qualifying activities for program eligibility, add a retroactive coverage policy to make coverage effective the first of the month in which the application was received, and remove premiums and Member Reports Accounts. The demonstration is currently authorized through September 30, 2025. The public comment period is open until February 20, 2025.

Georgia Governor Seeks to Exempt Certain Parents, Guardians from Medicaid Work Requirements. The Associated Press reported on January 15, 2025, that Georgia Governor Brian Kemp has proposed to exempt parents and guardians of kids up to age 6 in households at or below 100 percent of the federal poverty level from Medicaid work requirements. The new plan, which will be pursued through a Section 1115 demonstration, is expected to cost an additional $207,000 in IT costs if approved by the federal government. The current Georgia Pathways Medicaid program is set to expire in September 2025. Currently, Medicaid beneficiaries must complete 80 hours of work, job training, education, or community service every month.

Idaho

Idaho Receives Federal Approval to Extend Postpartum Medicaid Coverage to 12 Months. The Centers for Medicare & Medicaid Services (CMS) announced on January 17, 2025, that it has approved Idaho to provide 12 months of postpartum Medicaid coverage to pregnant Medicaid and Children’s Health Insurance Plan beneficiaries making up to 138 percent of the federal poverty level. An estimated 8,000 people will be eligible for the continuous coverage.

Indiana

Indiana Governor Orders Halt to Advertising for Medicaid Services. WWBL reported on January 21, 2025, that Indiana Governor Mike Braun has ordered managed care entities and the state Family and Social Services Administration to stop advertising the state’s Medicaid program, including radio and television advertisements. The order is part of the governor’s initiative to further constrain Medicaid eligibility.

Kansas

Kansas Governor’s Proposed Fiscal 2026 Budget Includes Medicaid Expansion Funds. Kansas Governor Laura Kelly released on January 16, 2025, the fiscal 2026 executive budget proposal, which requests $10.2 billion for the Kansas Department for Children and Families and includes $797.8 million to expand Medicaid beginning January 1, 2026. Under the proposed budget, $9 million will be allocated to the department to supplement the loss of funds that will be incurred due to Executive Order 25-01, which ensures that foster youth eligible for social security benefits receive the federal funding they are entitled to. This budget also includes $2.6 million to establish Behavioral Health Intervention Teams statewide for Child Welfare Providers to increase placement stability for youth in care who experience frequent placement disruptions.

Maine

Maine Legislature Begins Hearings on Governor’s Proposed Supplemental Budget for Medicaid Funding Gap. Maine Morning Star reported on January 21, 2025, that the Maine Legislature’s budget committee is beginning public hearings for Governor Janet Mills’ proposed $94 million supplemental budget to address a Medicaid funding gap totaling $118 million in the fiscal 2025 budget. Health care providers may see limited Medicaid reimbursements as early as this spring if the state Legislature fails to enact the supplemental budget promptly. Additionally, the Governor’s proposed fiscal 2026-27 biennium budget includes a 36 percent reduction in payments to doctors for Medicaid services over the next five years and would cost hospitals $24 million per year starting in 2026, with further reductions after that.

Maine Submits SUD Care Initiative Section 1115 Demonstration Amendment. The Centers for Medicare & Medicaid Services (CMS) announced on January 16, 2025, that Maine has submitted an amendment to its Substance Use Disorder (SUD) Care Initiative Section 1115 Demonstration seeking to adjust budget neutrality, citing changes in Medicaid rates and high utilization. The state is not proposing any changes to the services within the demonstration. CMS is accepting public comments through February 14, 2025.

Nevada

Nevada Receives Federal Approval to Offer Public Option Health Plans Beginning 2026. The Nevada Current reported on January 13, 2025, that the state has received approval from the Centers for Medicare & Medicaid Services for an addendum to its Section 1332 demonstration to offer public option health plans to eligible Nevadans on the state’s Silver State Health Insurance Exchange beginning calendar year 2026. The plans, called Battle Born State Plans, will have premiums that are at least 15 percent less than plans on the state exchange. The demonstration is authorized through December 31, 2026.

New Mexico

New Mexico Legislators Propose to Increase Health Care Spending by 27 Percent in Fiscal 2026. The Associated Press reported on January 15, 2025, that the New Mexico Legislature proposed a 5.7 percent general fund spending increase to $10.8 billion for the fiscal 2026 budget. The combined state and federal spending on health care in New Mexico would increase by $3.3 billion, or 27 percent, to $15.5 billion. The spending plan could also include a separate proposal to create a $1 billion endowment which would use investment earnings to expand mental health and addiction treatment services. New Mexico Governor Michelle Lujan Grisham is advocating for a 7 percent annual general fund spending increase.

New York

New York Governor Proposes 14 Percent Increase for Medicaid in Fiscal 2026 Budget. Crain’s New York Business reported on January 22, 2025, that Governor Kathy Hochul proposed a $252 billion budget for fiscal year 2026, which allocates $35.4 billion for the Health Department’s Medicaid budget, a 14 percent increase from last year. Hochul’s budget proposal also includes more than $1 billion in new funding for safety-net hospitals. The governor also proposed $1 billion for capital projects and $300 million for operating improvements within the safety-net transformation program. Hochul plans to offset some of those spending increases with revenue from the newly approved managed care organization tax, which is expected to generate $3.7 billion that will be used to help balance the state budget over three years.

New York Approves Seven Hospital Partnerships for Safety-net Transformation Program. Crain’s New York Business reported on January 21, 2025, that Governor Kathy Hochul has approved seven partnerships between hospitals and other facilities as part of the safety-net transformation program. The program incentivizes financially stable institutions to support care quality and financial stability at safety-net institutions by infusing the partnered facilities with state funds. Hochul did not disclose how much money would be allocated toward the partnerships, though $300 million was approved for the program in last year’s budget.

Oklahoma

Oklahoma Medicaid Director to Leave OHCA at End of January. KGOU reported on January 16, 2025, that Oklahoma’s Medicaid director, Traylor Rains, will be leaving the Oklahoma Health Care Authority (OHCA) at the end of January after nearly three years in the role. Rains’ predecessor, Melody Anthony, will serve as interim director.

Oregon

Oregon Awards Grant Funding to Tribes, 34 Organizations to Improve Living Environments. Oregon Health Authority (OHA) announced on January 16, 2025, that it has awarded $23 million to the Nine Federally Recognized Tribes of Oregon and 34 organizations, aiming to repair and rehabilitate homes of low-income residents to eliminate health risks. Each awardee received between $199,980 to $750,000 to use over a three-year period. The funds were made available by the Healthy Homes Grant Program, established to improve health by rehabilitating living environments.

South Carolina

South Carolina Governor Seeks Expedited Approval for Expanding Medicaid Coverage to Working Parents, Work Requirements. The South Carolina Daily Gazette reported on January 21, 2025, that South Carolina Governor Henry McMaster is seeking expedited approval of a new Section 1115 demonstration which would expand Medicaid eligibility to 100 percent of the federal poverty level for parents who are working or going to school. Under South Carolina’s existing eligibility rules, parents no longer qualify for Medicaid if they make more than 67 percent of the federal poverty level. The work and school requirements would only apply to parents between 67 percent and 100 percent of the poverty level. This initiative was previously approved through two Section 1115 demonstrations during President Trump’s previous administration.

South Dakota

South Dakota House Advances Ballot Measure to End Medicaid Expansion if Federal Funding Decreases. KXLG reported on January 22, 2025, that South Dakota House representatives voted 59-7 to put House Joint Resolution 5001 on the next general election ballot for South Dakotans. House Joint Resolution 5001 would remove the constitutional requirement for Medicaid expansion if federal matching funds fall below the current 90 percent rate. The measure now heads to the Senate. If approved by voters, the change would take effect July 2027.

South Dakota Medicaid Enrollment to Decrease by 10,000 Due to Ex Parte Renewals. South Dakota Searchlight reported on January 21, 2025, that South Dakota officials expect Medicaid enrollment to decrease by nearly 10,000 by mid-2025 because the state implemented ex parte or automated renewals. The state expects enrollment numbers will return to late-2024 levels by July 2026. Officials also expect expansion enrollment numbers to plateau in the next couple of years, with Governor Kristi Noem’s budget for fiscal 2026 predicting expansion enrollment to reach 32,296.

Tennessee

Tennessee Medicaid Agency Awards Ten Psychiatric Hospitals with Millions to Bolster Medicaid Care. The Tennessee Tribune reported on January 20, 2025, that TennCare is awarding ten psychiatric hospitals each with $1.5 million annually for two years to support care improvement efforts for TennCare members. The funds, which are available through the state’s Section 1115 TennCare III demonstration, will support infrastructure, workforce development, and enhanced clinical services.

National

President Trump Rescinds Executive Orders to Develop Three Drug Pricing Pilot Programs, Affordable Care Act Expansions. STAT reported on January 20, 2025, that President Trump has issued an executive order titled “Initial Rescissions Of Harmful Executive Orders And Actions” to reverse several of former President Biden’s top priorities, including an order to test Medicare and Medicaid models that could lower health care costs. Trump rescinded an executive order to create three new drug pricing policy experiments, which sought to cap certain generic drug prices at $2 for Medicare beneficiaries and improve access to high-cost therapies for Medicaid recipients. Trump also rescinded Biden’s executive order that led to longer enrollment periods for Affordable Care Act (ACA) Marketplace plans in most states and extra funding for the third parties that help people enroll in ACA insurance.

CMS Announces Selection of 15 Additional Drugs for Medicare Drug Price Negotiations. The Centers for Medicare & Medicaid Services (CMS) announced on January 17, 2025, that it will enter into Medicare drug price negotiations with manufacturers of 15 additional drugs selected for the program – Ozempic, Rybelsus, Wegovy; Trelegy Ellipta; Xtandi; Pomalyst; Ibrance; Ofev; Linzess; Calquence; Austedo, Austedo XR; Breo Ellipta; Tradjenta; Xifaxan; Vraylar; Janumet, Janumet XR; and Otezla. Drug companies with a selected drug will have until February 28, 2025 to decide if they will participate in negotiations which will occur in 2025, and any negotiated prices will become effective in 2027. The 15 drugs comprise approximately 14 percent of Medicare Part D prescription drug spending in the last year.

Health Insurance Marketplace Enrollment Totals 24.2 Million for 2025. The U.S. Department of Health and Human Services (HHS) announced on January 17, 2025, that a total of 24.2 million people have signed up for Marketplace coverage for 2025, including 3.9 million new customers, and 20.2 million returning. Approximately 17.1 million enrolled through Healthcare.gov, and 7 million enrolled through a state-based marketplace. This year marks an all-time high for enrollment, breaking last year’s record by 2.8 million.

CMS Releases Informational Bulletin on Opportunities to Improve HIV Care for Medicaid, CHIP Beneficiaries. The Centers for Medicare & Medicaid Services (CMS) released on January 15, 2025, an informational bulletin highlighting opportunities for state Medicaid agencies to improve HIV testing, prevention, and care delivery for Medicaid and Children’s Health Insurance Plan (CHIP) beneficiaries. The bulletin builds on guidance from 2016, and includes updated information based on the latest scientific evidence and recent advances in HIV care, such as long-acting treatments that remove the need for daily medication. The bulletin provides updates on clinical guidelines and innovation, as well as applicable federal guidelines that agencies may need.

Over Half of FFS Medicare Members Enrolled in ACO Arrangements, CMS Reports. Modern Healthcare reported on January 15, 2025, that 53.4 percent of all fee-for-service (FFS) Medicare beneficiaries are enrolled in accountable care organizations (ACOs), according to data from the Centers for Medicare & Medicaid Services (CMS). Participation in accountable care arrangements reached 14.8 million, representing a 4.3 percent growth from 2024 to 2025. CMS’s goal is to have all FFS Medicare enrolled in ACOs by 2030. Over this period, most accountable care arrangements saw growth; however, the ACO Realizing Equity, Access and Community Health (ACO REACH) model declined 3.8 percent to 2.5 million from 2024 to 2025. ACO REACH is authorized through December 31, 2026.

Biden Administration Finalizes Telehealth Opioid Use Disorder Treatment Rule. Roll Call reported on January 15, 2025, that the Biden administration finalized a rule allowing providers to prescribe six months’ worth of buprenorphine, an opioid use disorder treatment, through telehealth. Prescription continuation may be done through an in-person medical evaluation or treatment via another form of telemedicine. The rule notes that these new prescription limits would not apply to existing provider-patient relationships where the provider has already conducted an in-person patient exam. The Drug Enforcement Administration and Department of Health and Human Services also issued a proposed rule, which would create a special registration process for providers to be able to prescribe controlled substances through telehealth to patients they have not seen in person.

More than 44 Million People Combined Found Health Coverage Through Marketplace, Medicaid Expansion, BHP in 2024, KFF Finds. KFF reported on January 15, 2025, a combined 44 million people enrolled in health insurance coverage either through the Marketplace, Medicaid expansion, or Basic Health Plans (BHPs) in 2024, according to a KFF analysis. More than 1 million enrolled in a BHP, 21.4 million enrolled in a Marketplace plan, and 21.3 million found coverage through Medicaid expansion. The total represents one in six non-elderly Americans having found coverage through Affordable Care Act programs. The analysis also found that total enrollment in ACA plans increased 60 percent between 2020 and 2024. The growth is attributed both to more states adopting Medicaid expansion, and the enhanced subsidies for Marketplace plans, which are set to expire at the end of 2025 if Congress does not extend them.

Reduced Medicaid Funding More Likely to Harm Rural Residents, Report Finds. Georgetown University McCourt School of Public Policy Center for Children and Families released on January 15, 2025, a report examining Medicaid and Children’s Health Insurance Plan (CHIP) coverage in small towns and rural areas. The report found that children and non-elderly adults living in small towns and rural areas were more likely to get health insurance through Medicaid and CHIP, and therefore would be more likely to be harmed by reductions in federal Medicaid funding. In six states, at least half of children in rural areas are covered by Medicaid or CHIP, and in 15 states, at least one-fifth of non-elderly adults in rural areas are covered by Medicaid. In addition, the populations of rural areas and small towns that have a large share of tribal land and Native American residents are more likely to rely on Medicaid.

MACPAC Meeting Is Scheduled for January 23-24. The Medicaid and CHIP Payment and Access Commission (MACPAC) announced on January 16, 2025, that its next meeting will be held on January 23 and 24. The meeting will feature a special panel discussion on access to residential services for children and youth with behavioral health needs. Other discussion topics include commission votes on recommendations related to external quality review in Medicaid managed care; timely access to home and community-based services (HCBS) and streamlining HCBS authorities; medications for opioid use disorder claims analysis; and policy options for transitions of care for children and youth with special health care needs. MACPAC will request public comments at designated points during the webcast.