Secretary Kennedy Asks States to Share Medicaid Data with HHS

Earlier this summer, Secretary Robert F. Kennedy Jr. asked governors to share state Medicaid data with the Department of Health and Human Services (HHS) so that the agency can better track long-term outcomes of various drugs, such as GLP-1s and SSRIs. During the National Governors Association meeting, Secretary Kennedy noted that Medicaid data could be used to support longitudinal studies on potential “environmental injuries” as children and youths generally stay on the program longer than the average two-year enrollment period under private insurance. According to the Secretary, Indiana, Louisiana, and Oklahoma’s governors have agreed to begin sharing Medicaid data with the federal government. HHS intends to deidentify the data and share it publicly so that independent scientists can review (Inside Health Policy, August 5).

CMS Releases New Medicaid Managed Care Rate Development Guide

On August, 12, CMS released its 2025-2026 Medicaid Managed Care Rate Development Guide, which provides states and their actuaries with guidance for the development of Medicaid managed care capitation rates for rating periods starting between July 1, 2025, and June 30, 2026. States are expected to abide by the provisions in 42 CFR § 438 to ensure actuarial soundness. The current version does not intend to replace prior versions, but builds on the prior year’s guide and the rate certification experiences of both the agency and states. The rate development guide speaks to Medicaid managed care rates in general, for long-term care services, and new adult group capitation rates (Medicaid, August 12; CMS, August 12).

Aetna Makes Moves to Cut 87 MA Contracts across 34 states

Aetna plans to terminate 10% of its total Medicare Advantage (MA) contracts during the 2026 open enrollment period, about 87 contracts across 34 states. Of the contracts, 58 are Preferred Provider Organizations (PPO) and 29 are Health Maintenance Organizations (HMO). Additionally, the payer plans to pull back on its prescription drug plans (PDP) following the changes created by the Inflation Reduction Act, which made plans accountable for a greater portion of PDP related costs (Health Payer Specialist, August 6).

2025 Connecting Kids to Coverage Grant Awards Announced

The Centers for Medicare & Medicaid Services (CMS) has awarded $66M in five-year Connecting Kids to Coverage (CKC) cooperative agreements to 26 organizations in 19 states and tribal jurisdictions. These grants, ranging from $850K to $3M, are awarded with the purpose of increasing Medicaid and CHIP enrollment and retention for eligible children, parents, and pregnant women. Funded activities include family education on free or low-cost coverage, identifying likely eligible children, and assisting with applications and renewals. Awardees include community-based nonprofits, healthcare providers, and tribal organizations. Most awards were announced August 4, 2025, with two tribal grants scheduled for April 1, 2026. Since its launch in 2009, CKC has distributed $336.9M to 363 organizations (Insure Kids Now).

CMS Awards Final Grants for Promoting Continuity of Care for Incarcerated Individuals

Centers for Medicare & Medicaid Services (CMS) awarded four-year planning grants to state Medicaid and Children’s Health Insurance Program (CHIP) agencies to improve continuity of care for eligible individuals who are incarcerated pursuant to a funding opportunity the agency released in 2024. In January 2025, 12 states and territories received funding, and this week, CMS announced the final round of awards to 17 additional states with grants ranging from $1.2M to $4.6M each (Medicaid.gov, August 11).

Rural Health Transformation Funding: Key Recommendations from FAH and AHA

In August 2025, the Federation of American Hospitals (FAH) and the American Hospital Association (AHA) wrote to the Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz to highlight the importance of the Rural Health Transformation Funding (RHTF) under the One Big Beautiful Bill Act (OBBBA). Both organizations stressed that rural hospitals are essential to their communities but face financial pressures, staffing shortages, and changing Medicaid rules. They urged CMS to ensure the funding reaches these hospitals quickly and efficiently to maintain access to care (AHA, August 11; Federation of American Hospitals, August 8).

Key recommendations from the letters include:

• Prioritize funding for rural hospitals: Support critical services like emergency care, behavioral health, obstetrics, and specialty care, while investing in workforce recruitment and retention, facility upgrades, broadband expansion, telehealth, and other capital improvements. Ensure all rural hospitals, regardless of ownership, are eligible.
• Simplify and make the state application process flexible: Reduce administrative burdens, avoid requiring hospitals to spend money upfront, and allow states to adjust their plans over time to respond to changing needs or financial pressures.
• Ensure transparency and proper reporting: Clearly track how funds are used, report funding in Medicare cost reports, and make sure RHTF payments supplement existing federal support rather than replace it.
• Promote sustained access to care: Consistent, targeted funding is essential to prevent rural hospital closures and ensure rural Americans continue to receive essential services close to home.

CBO Releases New Analysis on OBBBA Impact on Household Resources

On August 11, the Congressional Budget Office (CBO) released a new analysis of the distributional effects of the budget reconciliation bill, now Public Law 119-21. The CBO also recently published an updated budgetary impact of the law in partnership with the Joint Committee on Taxation. Building on that analysis, the agency found that as a result of OBBBA, middle and high income households will see an increase in available resources, or available household income, during the 2026-2034 period. These households are projected to see increases of $800 to $13,600 per year, while lower income households  are projected to see a decrease in available resources of approximately $1,200 per year. This is largely due to the changes in federal taxes and cash transfers, which are estimated to have the largest impact on household resources, at an increase of $3.3T, in addition to any state changes to tax code in alignment with the federal government, an estimated $11B back to households. The CBO also predicts that states will use any reductions in benefit spending to increase spending in other areas, including tax relief. As a result, households are projected to see a $900B decrease in resources, disproportionately impacting low income households, due to the significant reduction in federal benefit spending and subsequent state budget revisions. Finally, the agency estimates that other federal spending on items like infrastructure, defense, and border security will increase household resources by $308B (CBO.gov, August 11).