According to Politico, nearly 4 in 10 enrollees in the ACA Marketplace are in “high-deductible” plans, up from 3 in 10 last year. The average out-of-pocket deductible on the Marketplace for a bronze plan in 2026 is over $7,000. This shift is driven by the expiration of pandemic-era enhanced subsidies which resulted in an increase in premium costs. While having lower monthly costs, high-deductible plans often don’t provide coverage for the first several thousand dollars spent on doctors’ visits, drugs, or surgeries. The Trump administration and other Republican lawmakers want to see ACA Marketplace subsidies shift to health savings accounts (HSA) that come with tax benefits for high-deductible plans. Conservative voices in the healthcare space argue that this type of plan would stymie overuse of the healthcare system and drive costs down while also giving individuals greater control over their healthcare spending. Opponents of high-deductible health plans note that while individuals may seek a low monthly premium, studies show that the high cost of services may cause them to delay care or take on medical debt.
In conjunction with Republican lawmakers’ efforts to pass legislation that directs subsidies into HSA accounts, the Trump administration has also proposed a rule that would expand alternative health plan options for consumers on the ACA Marketplace, such as non-network and catastrophic plans, that offer less coverage for a lower monthly price. Ultimately, conservative lawmakers and stakeholders argue for more options at various price points for consumers to select their preferred payment and coverage amount. Meanwhile, opponents point out that most consumers would lack the knowledge to select appropriate coverage, and any shifts in the risk pool of the Marketplace could result in increased costs for remaining enrollees and insurers (Politico, May 3).
KFF released its annual survey of Medicaid and CHIP program officials on April 30, with a focus on the implementation of federal community engagement or work requirements. By January 1, 2027, 43 states will be required to operationalize work requirements for their Medicaid expansion populations, including Georgia and Wisconsin. According to survey responses, most states plan to adopt less restrictive policies, while seven states reported plans to adopt more restrictive policies, like an increased number of months in lookback periods, more frequent eligibility checks, and not adopting any available hardship exemptions.
Work requirements are also prompting states to connect with data sources that have not previously been utilized by state Medicaid agencies, like the National Student Clearinghouse, VA Benefit Summary Letter, and data from sister agencies like Correction or Labor Departments. Most states indicated that they planned to expand automated processes for verification. Similarly, most states reported that they plan to use claims data to automate the verification of medical frailty and plan to allow self-attestation for medical frailty. Outstanding questions for CMS to address through the interim final rule include how to define certain exemptions, like medical frailty and community engagement activities, and what verification methods are acceptable. Given the short timeframe for implementation, most states reported that they will work with existing vendors and raised concerns about untested products. Six states reported that they intend to use AI to assist with administrative tasks to support staff (KFF, April 30).
CMS announced it will push the launch of the CMS’ Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (BALANCE) model until July 1, 2026, after hesitation from some participating plans. Payers were initially asked to commit by April 20. UnitedHealth’s CEO of government programs commented that the payer would participate in the demonstration during a recent earnings call, but alluded to the challenges and outstanding questions about the model. The payer is actively working with CMS on recommendations for the model. The BALANCE program would allow certain Medicare Part D beneficiaries to access GLP-1 medications, for a co-payment of $50 per month. The BALANCE model will continue as planned for state Medicaid programs, with a join date of May 2026 through January 1, 2027 (Health Payer Specialist, May 1).
CMS extended deadlines for both drug manufacturers and state Medicaid agencies to apply for the GENEROUS Model after strong manufacturer interest, particularly from small- and mid-sized companies seeking more time to assess participation requirements. Drug manufacturers now have until June 11, 2026, to apply and until July 17, 2026, to finalize agreements, while states have until September to apply and to complete participation agreements. The model, launched in November 2025, is intended to improve Medicaid access to participating manufacturers’ drugs while allowing participating states to purchase included drugs at prices aligned with select international benchmarks to support fairer, more competitive pricing. Eligible manufacturers must participate in the Medicaid Drug Rebate Program and produce at least one drug (CMS, April 29).
HHS launched the MAHA (Make America Healthy Again) Action Plan, a cross-agency initiative focused on psychiatric prescribing practices, informed consent, deprescribing, and access to non-pharmacological mental health interventions. As part of that effort, HHS issued a joint Dear Colleague Letter from SAMHSA, CMS, HRSA, and ACF emphasizing shared decision-making, fully informed consent, regular reassessment of psychiatric medications, and use of evidence-based therapies such as psychotherapy, family-based interventions, nutrition, and behavioral supports when clinically appropriate. The letter also notes that psychiatric medications remain appropriate for some patients and that any treatment changes should be individualized. In addition to the policy guidance, the MAHA Action Plan includes implementation and research activities across federal agencies, including SAMHSA prescribing trend reports and clinician webinars, technical expert panels to inform future HHS guidance, provider training initiatives, CMS reimbursement guidance related to deprescribing and non-medication care, and NIH/FDA research into additional mental health treatment approaches.
Within that framework, the Dear Colleague Letter places emphasis on children and adolescents, including foster youth, whom ACF identified as vulnerable to psychiatric overprescribing. The letter states that federal law under Title IV-B of the Social Security Act requires states and jurisdictions to maintain protocols overseeing prescription medications for children in foster care, including psychotropic medication practices, and notes that ACF reviews annual state reports to monitor compliance with those requirements. The guidance also highlights efforts to expand evidence-based therapies and non-pharmacological interventions for foster youth, while supporting kinship caregivers, streamlining foster family licensing, expanding community-based supports, and leveraging federal funding and technical assistance to reduce foster care entry through initiatives such as A Home for Every Child. Additional federal initiatives referenced include mandatory Medicaid and CHIP reporting on psychosocial care for children prescribed antipsychotics, EPSDT behavioral health guidance, HRSA pediatric mental health consultation programs, and Innovation Center models focused on coordinated care and family partnership for children and youth with complex behavioral health needs (HHS, May 4).
On April 30, CMS Administrator Dr. Mehmet Oz announced that CMS would defer an additional $91M in federal funding for Minnesota’s Medicaid program. This is in addition to the existing $260M that the agency continues to withhold while the state pursues the funds through the courts. Advocates of Minnesota’s Medicaid program oppose the new deferral of the state’s federal funding. A research professor with Georgetown University Center for Children and Families highlighted the constraints the state is facing, navigating the recertification of 5,800 high-risk providers while also lacking $350M in federal funding. Most of the latest fund deferment, $76M of the $91M, is connected to 14 “highly vulnerable” service categories. The remaining $14M is being withheld due to program integrity concerns from CMS, such as payments for ineligible enrollees. CMS is seeking more information from Minnesota to verify claims that have been flagged as fraudulent by the administration (Inside Health Policy, April 30).
On April 24, the Arizona Health Care Cost Containment System (AHCCCS) released an RFP for a statewide marketing contractor to provide Medicaid beneficiaries with awareness of new work requirements and help ensure that they’re successfully meeting standards, as well as provide support to providers and community partners. The budget for this project is $750,000, and contractors will have to abide by four phases, including (1) stakeholder input, (2) planning and messaging development, (3) publication, implementation, and compliance, and (4) monitoring and optimization. Applications are due on May 28, 2026, by 3 pm MST (Health Payer Specialist, April 29).
Idaho delayed its statewide Medicaid managed care expansion from 2029 to at least 2030 after Gainwell Technologies sued over the state’s award of a Medicaid claims processing contract worth more than $300M in monthly payments to Acentra Health. A judge issued a temporary restraining order and raised concerns about Idaho’s procurement process for the contract. The disputed contract involves Idaho’s Medicaid management information system, which state officials said is necessary before broader implementation of managed care required under legislation passed last year. Idaho currently uses managed care for dual-eligible populations and plans to expand it statewide. The lawsuit challenges whether Idaho’s bidding process complied with state requirements. State officials maintain the process was lawful, while further court action on a preliminary injunction could determine whether delays extend beyond the current one-year shift (Health Payer Specialist, May 1).
Nebraska began enforcing Medicaid work requirements for ACA expansion adults before the federal 2027 deadline, making it the first state to implement the new requirements. Expansion enrollees ages 19–64 must meet monthly work, education, or community engagement thresholds unless exempt. Of roughly 70,000 Nebraskans covered through Medicaid expansion, experts estimate a substantial share could lose coverage, with disenrollment expected to result from both eligibility rules and administrative compliance requirements. As implementation begins, the rollout has highlighted administrative issues related to beneficiary notification, staff preparedness, exemption processing, and verification standards for medically frail individuals. Nebraska released detailed exemption criteria shortly before launch, but questions remain about how eligibility determinations and documentation systems will function in practice. With Nebraska moving ahead before full federal implementation guidance was finalized, the state’s experience may shape how other states approach similar policies (Inside Health Policy, May 1; CBS News, May 1).
Speaking to state insurance officials last week at the National Association of Insurance Commissioners (NAIC) Spring meeting in San Diego, CMS officials indicated that several major proposals in the draft 2027 Marketplace rule may not be finalized this year and could be delayed. As CMS works to better understand enrollment and coverage trends, the draft rule outlines several proposed policy changes to the Marketplace. These include expanding access to catastrophic plans, allowing multi-year contracts up to 10 years, and permitting certain non-network plans to participate in the Marketplace. The rule also includes changes related to eligibility verification, state benefit defrayal, and exchange flexibility. Given tight timelines between the rule release, comment period, and upcoming plan submissions, CMS indicated it may take a more gradual approach, and some stakeholders have urged delaying more complex proposals until at least 2028 (Inside Health Policy, March 25).
Indiana is proposing changes to limit hospital use of the federal 340B Drug Pricing Program for Medicaid patients. The proposal, introduced by Secretary Mitch Roob, would eliminate Medicaid reimbursements tied to 340B and instead shift to the Medicaid Drug Rebate Program, with an estimated $60M in annual state savings and a July 1 implementation date. State officials argue the change would ensure savings remain within Medicaid, while hospitals, particularly rural providers, warn the loss of 340B revenue could reduce funding for services such as cancer care and obstetrics and further strain facilities operating on thin margins (Indiana Capital Chronicle, April 6).
On April 8, CMS issued a letter to state officials on the implementation of Section 71109 of the OBBBA, under which federal financial participation (FFP) for Medicaid and CHIP services must be limited to US citizens, green card holders, Cuban and Haitian entrants, and individuals eligible under the Compact of Free Association (COFA). While states will no longer be able to claim federal matching funds for non-citizens, the agency clarifies that funds will remain available for the treatment of emergency conditions. Due to the nature of this being a statutory change, states will be required to verify beneficiaries’ immigration status, first with electronic data sources and if needed to reach out to them (Inside Health Policy, April 9).
Plans are underway for states to conduct Medicaid provider revalidation, with a focus on identifying inactive, unresponsive, or potentially illegitimate providers, particularly in high-risk categories. States would have 30 days to submit plans outlining how they will carry out these reviews, as previewed by CMS Administrator Mehmet Oz, MD. Dr. Oz pointed to significant gaps in provider enrollment data, including examples where roughly 5,000 providers are listed but fewer than 20% can be verified as responsive or active. He also indicated that CMS has already linked program integrity concerns to funding actions in some states, including signaling up to $2B in potential withholding. As a result, state responsiveness is expected to shape future federal enforcement, with additional audits and funding pressure likely to be directed toward states that do not demonstrate meaningful progress (Fierce Healthcare, April 21).
As Medicaid and CHIP policy requirements continue to expand through new federal statutes, regulations, and technical guidance, CMS developed the Medicaid and CHIP Policy Implementation Roadmap to help State Medicaid Agencies anticipate how these evolving requirements may affect state policy, operations, and Medicaid Enterprise Systems. Designed as a multi-year planning resource, the roadmap provides an illustrative timeline of selected provisions from major final rules and statutes between 2025 and 2030 that are most likely to create operational or technology-related impacts. CMS emphasizes that the roadmap is not a comprehensive list of every requirement, but rather a strategic reference tool to support proactive implementation planning while states continue to rely on final rules and statutes as the official compliance standard.
The roadmap highlights a phased policy transformation over several years. Early implementation priorities in 2025 and 2026 focus on foundational system and compliance changes such as provider directory standards, access and managed care transparency requirements, quality reporting, beneficiary communication updates, eligibility process reforms, and provisions tied to the Consolidated Appropriations Act and Working Families Tax Cut legislation.
Beginning in 2027, CMS places greater emphasis on person-centered service planning, continuous quality improvement, interoperability, prior authorization transparency, and stronger incident management systems. By 2028 through 2030, implementation priorities increasingly center on Home and Community-Based Services (HCBS), including HCBS quality measure sets, payment adequacy standards, public quality ratings, and expanded electronic oversight systems. Together, these milestones reflect CMS’s push for stronger transparency, modernized systems, quality oversight, and beneficiary protections, requiring states to treat compliance as an ongoing operational priority rather than a one-time policy update (Medicaid, April).
