States of Innovation: August 2025

States continued to react to federal policy in August, taking action to highlight cuts in funding to Medicaid as a result of H.R.1. Colorado held a special session to address budget shortfalls resulting from H.R.1 while Oregon and Wisconsin published updated estimates of the impact on Medicaid funding and coverage. Maryland, Michigan and Vermont took steps to explain to consumers how H.R.1, the Marketplace Integrity final rule and the expiration of enhanced premium tax credits (ePTCs) will impact affordability during this year’s open enrollment period. Multiple states, including Mississippi, took steps to collect public input on their application to the Rural Health Transformation Program (RHTP). State Health and Value Strategies (SHVS) is tracking how states are preparing for RHTP. SHVS also published key considerations for states as they design their transformation plans to apply for the fund. 

In August, state Marketplace innovations included Illinois being approved by CMS to transition to a State-Based Marketplace, Massachusetts requiring insurers to provide rebates to consumers, and Pennsylvania launching a new network of regional Navigators. Delaware announced it will eliminate $50 million in medical debt for 17,000 state residents. 

Other state activity in August included Arizona taking steps to address affordability and cost and several states announcing plans or additional oversight to improve care for their aging populations. States continue to host their first Beneficiary Advisory Council (BAC) meetings, with New Mexico posting the materials from their first meeting, while California highlighted the value of community engagement in a report sharing the experiences of Medicaid members who have been serving on the state’s BAC-like committee. State efforts to expand access to care in August included North Dakota releasing a blueprint to promote cancer prevention and New Mexico training incarcerated individuals to provide peer support. 

States continued to focus on maternal and infant health in August, with Mississippi declaring infant mortality a public health emergency and New Jersey launching a website to support breastfeeding. State action on mental and behavioral health included Maryland expanding its peer recovery program, North Carolina launching a mobile opioid treatment initiative and Virginia expanding access to crisis services.  In support of reproductive and women’s health, California launched a hotline for providers while Massachusetts updated its shield law. 

Affordability and Efforts to Address Cost

Arizona Governor Katie Hobbs signed an executive order to lower the cost of prescription drugs. Arizona is joining ArrayRx, the multi-state public pharmacy collaborative that offers discounted prescription drug prices. Arizonans who use the ArrayRx Discount Card program will be able to lower the cost of their prescription drugs by up to 80%.

Aging and Long-Term Care

Maryland released a plan to support older adults. Governor Wes Moore launched Longevity Ready Maryland, a 10-year multisector plan to coordinate services and policies that support Maryland’s growing population of older adults.​ Longevity Ready Maryland aims to support the work of service providers by consolidating resources, coordinating efforts, and transforming systems of care to more sustainably accommodate a greater number of older Marylanders. The Maryland Department of Aging will work to encourage collaboration between state agencies, support local initiatives, and improve access to home- and community-based services.

Oregon is implementing recommendations from a report on nursing and residential care facilities. The Oregon Department of Human Services Office of Aging and People with Disabilities is implementing recommendations from an independent consultant’s external assessment of its unit that oversees nursing, assisted living and residential care facilities as well as adult foster homes. The report includes a framework for processes to realign staff in relationship to workload; update practices for efficiency; clarify procedures for state and federal regulations; implement new legislation and provide ongoing training for staff.

Virginia is strengthening oversight of nursing homes. Governor Youngkin signed Executive Order 52, launching a series of initiatives to strengthen oversight of nursing homes in Virginia, with the intended goal of ensuring nursing homes meet the highest standards for safety, quality, and transparency. 

Community Engagement

California published a report highlighting the experience of Medicaid enrollees who have served as advisory committee members. In May 2023, the Department of Health Care Services (DHCS) launched the Medi-Cal Member Advisory Committee (MMAC), which serves as the state’s Beneficiary Advisory Council (BAC). DHCS released an external evaluation of the value, experience, and impact of the MMAC between May 2023 and December 2024, which found that MMAC members valued their experience and were proud of the ways they have contributed, citing concrete examples of how they informed member-facing communications so all Medi-Cal members can understand and use them.  

New Mexico held its first Beneficiary Advisory Council meeting. The New Mexico Healthcare Authority posted the slides and meeting minutes from the kick-off meeting of the state’s Beneficiary Advisory Council. 

Coverage for Non-Citizen Populations

California is reaching out to Marketplace enrollees who are no longer eligible because of their immigration status. Covered California, the state’s official health insurance Marketplace, published information and resources intended for the more than 2,300 enrollees who are Deferred Action for Childhood Arrivals (DACA) recipients, no longer eligible for coverage due to the Marketplace Integrity rule, beginning August 31, 2025. Covered California is contacting every affected individual through letters, emails, and calls and developed frequently asked questions in English and Spanish. 

For more information and other changes to eligibility and affordability under the Marketplace Integrity rule, see SHVS’ recent regulatory analysis. For the latest on the lawsuit challenging the Marketplace Integrity rule, see this expert perspective. SHVS also published a summary of the provisions in H.R.1 that will scale back access to health coverage for many lawfully residing non-citizens, which are estimated to leave 1.3 million more immigrants uninsured.

Expanding Access to Care

North Dakota released a blueprint to promote access to cancer prevention and screening. The Department of Health and Human Services (HHS) and partner organizations have developed the 2025-2035 Cancer Control Plan, which is a blueprint for prevention, screening and early intervention while promoting quality of life for North Dakotans living with cancer. In collaboration with community partners, HHS offers help with breast, cervical and colorectal cancer screenings to qualifying uninsured and underinsured individuals.

New Mexico is training incarcerated individuals to provide peer support. The New Mexico Health Care Authority announced that in a new cross-agency partnership, nine incarcerated individuals trained inside correctional facilities are poised to become Certified Peer Support Workers (CPSW). A CPSW is someone who has experienced long-term recovery from mental health and/or substance-use conditions and is trained to help others in their recovery. The training is a partnership between the Health Care Authority’s Office of Peer Recovery & Engagement and the New Mexico Corrections Department and additional training is planned in prisons and jails across the state in the coming months to prepare more incarcerated individuals to serve as peer support workers.

Highlighting the Value of Marketplace Coverage

Washington is sharing the stories of individuals enrolled in subsidized Marketplace coverage. The Washington Health Benefit Exchange is highlighting stories from enrollees about how access to affordable health insurance has affected their lives. The testimonials were given during a recent board meeting in light of the myriad recent federal changes to State-Based Marketplaces and the impending potential expiration of ePTCs before Congress. 

Maternal and Infant Health

California released a concept paper on postpartum care. The Department of Health Care Services released a concept paper, “Enhancing Postpartum Care for California’s Birthing Population through ‘The Postpartum Pathway,’” recognizing that most maternal morbidity and mortality occurs during the postpartum period. The concept paper proposes a measurable clinical model that supports whole-person care by addressing both medical and social drivers of health. The Postpartum Pathway is intended to be tested by health plans, providers, and community organizations to assess feasibility, refine the model, and support long-term improvements in postpartum care. 

Mississippi has declared infant mortality a public health emergency. The Mississippi State Department of Health declared a public health emergency in response to rising infant mortality rates across the state. Mississippi’s 2024 data show the overall infant mortality rate has increased to 9.7 deaths per 1,000 live births, which is the highest in more than a decade.

New Jersey launched a one-stop website resource for breastfeeding. Nurture NJ announced the launch of the NJ Supports Breastfeeding initiative, a central element of the 2022-2027 New Jersey Breastfeeding Strategic Plan. The website is a one-stop resource for breastfeeding education, support, and empowerment. NJ Supports Breastfeeding also includes a directory of lactation support providers by county.

Marketplace Innovations

California is allocating $190 million in subsidies to make premiums more affordable. Covered California, the state’s official health insurance Marketplace, is highlighting a preliminary weighted average rate increase of 10.3%, which would be reduced if Congress extends the ePTCs. For 2026, the state has allocated $190 million to provide state subsidies for individuals earning up to 150% of the federal poverty level (FPL), ensuring monthly premiums remain comparable to 2025 levels, and some additional assistance for those earning up to 165% FPL, but the funding does not fill the $2.1 billion hole if Congress does not extend the ePTCs.

Illinois was approved by CMS to transition to a State-Based Marketplace. Get Covered Illinois announced that CMS approved Illinois’ transition to a State-Based Marketplace. The Customer Assistance Center, along with a newly designed website, will go live on October 1. Beginning November 1, Illinoisans who were previously enrolled through HealthCare.gov will transition to Get Covered Illinois for their 2026 coverage.

Massachusetts is requiring several insurance carriers to provide rebates to consumers. Governor Maura Healey’s Division of Insurance announced that five of the state’s health insurance carriers will return $75.6 million to over 350,000 people covered by individual and small employer plans under the state’s enforcement of state laws. Massachusetts’s medical loss ratio (MLR) requires carriers to spend at least 88% of premiums on healthcare services, and when a carrier’s average MLR over a three-year period falls below the required threshold, it is required to rebate a portion of premium payments to individuals and small employers.

New Jersey is providing $5 million in grants to fund Navigators. Department of Banking and Insurance Commissioner Justin Zimmerman announced $5 million in available grant funds for community organizations to serve as state-certified Navigators for the Marketplace open enrollment period and throughout 2026. The grant program continues to be funded by the user fees that support the Department’s operation of the State-Based Marketplace.

Pennsylvania’s Marketplace is launching a new network of regional Navigators. Pennie, the state’s official health insurance Marketplace, in coordination with Health Market Connect LLC, the newly appointed contractor of Pennie’s Assister Network, is launching a new network of regional organizations dedicated to providing localized support throughout the Commonwealth. The appointed regional organizations will be responsible for hiring local Pennie-Certified Assisters who will serve as trusted guides throughout the enrollment process and conducting outreach to the uninsured.

Medical Debt

Delaware announced it will eliminate $50 million in medical debt. Governor Matt Meyer announced a partnership between the state and the national nonprofit Undue Medical Debt, leveraging $500,000 in state funds to purchase and eliminate up to $50 million in medical debt for an estimated 17,000 or more Delawareans. Governor Meyer also signed legislation removing medical debt from credit reporting to help Delawareans improve economic stability. 

For more information on state efforts to prohibit medical debt reporting and eliminate existing debt, see the SHVS expert perspective Mapping State Efforts to Address Medical Debt and a Health Affairs Forefront article which examines the burgeoning trend of state efforts to cancel medical debt for just pennies on the dollar. SHVS also published a state spotlight profiling North Carolina’s Comprehensive Medical Debt Relief and Reform Incentive Program.

Mental and Behavioral Health

Maryland is expanding peer recovery. Governor Wes Moore launched Rural Advancement for Maryland Peers, also known as RAMP—a $1.6 million grant program to help more Marylanders in rural communities access support to address substance-use. Administered through a partnership between the Maryland Department of Labor and the Maryland Department of Health, the funds will help expand and strengthen Maryland’s certified peer recovery specialist workforce—individuals with lived experience in recovery who are trained and certified to support people going through recovery.

North Carolina launched a virtual therapy program and a mobile opioid treatment initiative. The North Carolina Department of Health and Human Services (NCDHHS) announced a partnership with Talkspace, a virtual therapy platform now available for free to justice-impacted teenagers between the ages of 13 and 17. The two-year program will serve as many as 20,000 youth impacted by the legal system, including people who may have personally been detained/court-involved, have lived experience as victims of crime or are otherwise identified as at risk (for example, having incarcerated members of family). NCDHHS also announced the launch of the state’s first Mobile Opioid Treatment Program. Opioid Treatment Programs are state and federally licensed programs that provide Medications for Opioid-Use Disorder along with other supports for treatment and recovery, including counseling, case management and peer support services.

Oregon signed into law four new bills to improve and expand access to mental health and care for substance-use. Governor Tina Kotek signed four bills to improve and expand mental health and substance-use care in Oregon. House Bill 2005 updates civil commitment and “aid and assist” practices to improve legal interventions for individuals with serious mental illness who may temporarily need a higher level of care, complemented by House Bill 2059, which increases the state’s treatment capacity with a $65 million investment. House Bill 2024 allocates $6 million to recruit and retain essential workers in mental health and substance-use care. House Bill 3321 requires the Alcohol and Drug Policy Commission to develop and implement a statewide substance-use prevention plan with strategies tailored to youth and invests $1 million in the effort.

Virginia is expanding access to specialized crisis services. Governor Glenn Youngkin announced three new grant awards that will expand access to specialized crisis services for Virginians experiencing behavioral health emergencies. The funding will support the development of crisis receiving centers and crisis stabilization units. The awards are part of the $1.4 billion investment in Right Help, Right Now, Virginia’s transformational plan for behavioral healthcare.

Washington issued a fine for violations of the Mental Health Parity and Addiction Equity Act. Washington state Insurance Commissioner Patty Kuderer announced she has fined Premera Blue Cross $550,000 for violations of the Mental Health Parity and Addiction Equity Act (MHPAEA) and Washington’s provider directory regulation. MHPAEA requires health carriers to explain the treatment limitations in their plans and how those limitations compare between behavioral health benefits and medical and surgical health benefits, which Premera was unable to do. Along with the fine, Premera must update its provider directories by October 31 to comply with state regulations.

Reproductive and Women’s Health

California launched a new hotline for reproductive healthcare providers. The Department of Health Care Services, in collaboration with the University of California, San Francisco, launched a new Reproductive Health Hotline (ReproHH), which is a free, confidential clinician-to-clinician consultation phone service for all providers, including Medi-Cal providers, who have questions about sexual and reproductive health. ReproHH is staffed by physicians with specialized expertise in these clinical areas to minimize the need for referrals to specialists, avoid unnecessary treatments, and enhance healthcare outcomes.

Massachusetts updated its shield law. Governor Maura Healey signed an updated Shield Law to strengthen protections for patients and providers. The new law prevents the disclosure of sensitive data, such as a physician’s name, and formally establishes that abortions are to be provided in emergencies due to medical necessity. Additionally, the law prohibits Massachusetts state or local authorities from cooperating with any federal or out-of-state investigation into healthcare services that are legally protected in Massachusetts, such as abortion care.

States React to Federal Policy

Colorado held a special session to address budget shortfalls resulting from H.R.1. Governor Jared Polis called the state General Assembly back into session to address the significant impact of the federal government’s budget bill on Colorado’s budget. Governor Polis signed a number of bills passed during the session and took executive action to address the billion-dollar budget hole created by H.R.1. HB25B-1006 provides temporary funding to reduce catastrophic premium increases and Colorado Insurance Commissioner Michael Conway released a statement highlighting the legislation. SB25B-002 ensures that Medicaid enrollees can continue receiving healthcare services from providers like Planned Parenthood and SB25B-005 reallocates funding to the Colorado health insurance affordability enterprise.

Maryland is encouraging enrollees to use their coverage before premiums increase as a result of changes at the federal level. Maryland Health Connection, the state’s official health insurance Marketplace, published a blog highlighting changes under federal rules for plan year 2026, including encouraging enrollees to continue using their 2025 coverage, plan for higher costs due to the scheduled expiration of the ePTCs, catch up on taxes to reconcile previously received PTCs, and to check their Marketplace account to update their income. For more information about the new federal regulatory and legislative requirements for Marketplaces, see the recent SHVS webinar.

New York highlighted the impact of the end of continuous enrollment for children. Governor Kathy Hochul released new, county-level data showing that the new policy from CMS on continuous enrollment threatens to disrupt coverage for more than 750,000 young children across the state. A recent letter from CMS outlined the federal government’s decision to phase out programs that provide continuous Medicaid coverage for vulnerable populations, including New York’s initiative which ensures continuous coverage for children from birth to age six.

Michigan will educate consumers about federal changes that will affect affordability. Governor Gretchen Whitmer signed an executive directive asking the Michigan Department of Insurance and Financial Services (DIFS) to support Michiganders’ access to affordable health insurance, in response to recent federal actions that will make it harder for people to get and keep their health coverage and raise the cost of healthcare. The directive asks DIFS to raise awareness and educate Michiganders on what they need to do to keep or get health insurance during this open enrollment period and requires DIFS to answer Michiganders’ insurance questions on their helpline as well as connect Michiganders with Navigators and other support available.

Mississippi collected public input to inform the state’s application to the Rural Health Transformation Fund. The Office of the Governor, in coordination with the Division of Medicaid (DOM) and the Mississippi State Department of Health (MSDH), collected public input through a public survey and a stakeholder forum to develop a Rural Health Transformation Program (RHTP) plan and submit a timely application for the grant funding. DOM in coordination with the Office of the Governor and (MSDH, also solicited quotes from consultants to prepare the state’s application for the RHTP. SHVS is tracking how states are preparing for their applications for the RHTP and also published a framework for states as they develop their RHTF applications. 

Oregon expects a cut to federal funding of $15 billion as a result of H.R.1. Governor Tina Kotek announced that the budget reconciliation bill is projected to cut $15 billion in federal funding from Oregon for health insurance coverage, food benefits, and other programs. The announcement is the result of a preliminary analysis by the State of Oregon’s Chief Financial Officer and an impact analysis summarizing the loss of federal funding to the Oregon Health Authority is available here.

Rhode Island is convening an advisory group to analyze the impact on Medicaid resulting from H.R.1. The Executive Office of Health and Human Services, in conjunction with the Governor’s Office, established a Federal Compliance Advisory Group to assist in the review and analysis of potential impacts of any federal actions related to the Medicaid Program. 

Vermont launched webpages to explain changes to Medicaid and the Marketplace resulting from H.R.1. The Department of Vermont Health Access has created a landing page to explain federal Medicaid changes. The page explains how new rules will change how people apply for and stay enrolled in Vermont Medicaid. Additionally, Vermont Health Connect, the state’s official health insurance Marketplace, created a landing page to explain changes that will impact consumers. 

Wisconsin published new estimates of how H.R.1 will increase costs for taxpayers. Governor Tony Evers released new estimates showing H.R.1 will increase costs to Wisconsin taxpayers by over $284 million over a two-year biennial budget cycle, while forcing over 270,000 Wisconsinites to lose their health insurance and tens of thousands of Wisconsinites to lose access to basic food necessities.

Waiver and State Plan Amendments, Requests and Approvals

Louisiana submitted a state plan amendment to increase Medicaid reimbursement rates for physicians. The Louisiana Department of Health (LDH) announced an increase in Medicaid reimbursement rates for physicians through funding authorized by the state legislature. To implement the new rates, LDH has initiated the formal rulemaking process and submitted a state plan amendment to CMS. An emergency rule was published in the Louisiana Register with the effective date of July 1, 2025, allowing the rate increase to take effect while the final rule is being finalized.