Kentucky Governor Reverses Medicaid Rate Cuts

Kentucky Governor Andy Beshear announced that there will not be a 4% rate cut to Medicaid providers in August. Due to higher than expected revenue collections from the corporate income tax and other budget surpluses, $225M can be directed to the Medicaid program through FY2027 to prevent rate reductions. Additional revenue surpluses will provide $4M for the Nutrition Program for the Elderly and fully fund all authorized Michelle P. Waiver program slots to serve individuals with intellectual and developmental disabilities. The Secretary of the Cabinet for Health and Family Services along with the Governor noted that long-term funding challenges still need to be addressed (Kentucky Lantern, July 22; WKDZ, July 22).

Alabama Officials Seek Delay of H.R. 1 SNAP Policy

In Alabama, Department of Human Resources (DHR) officials are seeking a two-year delay of the Supplemental Nutrition Assistance Program (SNAP) error rate cost sharing requirement put into place by H.R. 1 last year. Starting October 1, 2027, states with SNAP payment error rates above 6% will need to begin paying for a percentage of the program’s benefits, something that states have previously never had to account for. Over the first five months of FY2026, Alabama’s error rate was 9.55%. However, states with very high error rates of 20% or higher have an additional two years to bring their rates below 6%. The SNAP Director received approval from the DHR board to ask the state’s Congressional representatives to delay the H.R. 1 policy. Alabama’s current SNAP enrollment is approximately 650,000, nearly half of which are children (Alabama Reflector, July 24).

Wisconsin Extends Postpartum Medicaid Coverage to 12 Months

Wisconsin began extending postpartum Medicaid coverage from 60 days to 12 months in July. Under the new policy, the Wisconsin Department of Health Services estimates that about 16,000 Medicaid beneficiaries will receive extended coverage over the next year. Medicaid currently covers approximately two in five births in the state, and officials said the extension is intended to reduce coverage gaps and support access to physical and behavioral health services during the postpartum period. The policy also responds to concerns that nearly half of pregnancy-related deaths occur within one year after pregnancy. With the change, Wisconsin became one of the last states to adopt a 12-month postpartum coverage period (Civic Media, July 20).

Connecticut Governor Looks to Extend ACA Subsidies in 2027

Governor Ned Lamont announced his intent to extend ACA subsidies beyond 2027. This year, the state is covering enrollees whose enhanced federal subsidies expired, including individuals whose incomes are between 100 to 200% FPL, with $115M in funding from an emergency response fund. The extension is also supported by State Representative Josh Elliot, his Democratic opponent in the upcoming gubernatorial race, who has also promised a long-term replacement plan; while the Republican nominee, State Senator Ryan Fazio opposes the idea. One of Governor Lamont’s ideas includes a proposed tax on large companies whose employees utilize Medicaid for healthcare, which could bring in about $100M in revenue. State legislators look to be split in their support to commit to continued year-over-year assistance, due to surging healthcare costs. Connecticut is one of seven states that have used state dollars to offset the loss of federal subsidies (CT Mirror, July 23).

Arizona Proposes Changes in Section 1115 Waiver Renewal Request

With its current Section 1115 demonstration approved through September 30, 2027, Arizona is seeking a five-year renewal covering October 1, 2027, through September 30, 2032. The request would continue Arizona’s statewide managed care model and existing demonstration authorities while proposing several key changes. Among those changes, Arizona is seeking to expand reimbursement for Traditional Health Care Practices provided through Urban Indian Organizations by removing the requirement that an Indian Health Service or Tribal 638 facility initiate the care coordination agreement. Proposed H2O revisions would clarify provider requirements, remove references to certain service and training models, and allow Arizona to refine qualifying chronic health conditions based on program data without expanding the program’s population, enrollment caps, or overall scope. For children receiving home and community-based services, the state is requesting up to 28 days to complete Extraordinary Care Reviews, compared with the current seven-day timeframe and possible 14-day extension. Urgent reviews would remain subject to a 72-hour deadline, and members would continue receiving approved service levels while reviews are underway.

The remaining changes address behavioral health, program financing, and eligibility administration. Arizona plans to seek separate authority before July 2027 for an Enhanced Residential Treatment Pilot Program serving adults with serious mental illness. The state would sunset Targeted Investments 2.0 after its federal financing mechanism ends. The renewal further proposes eliminating Hospital Presumptive Eligibility because of limited use and requiring documentary or electronic verification of residency rather than accepting self-attestation when verification is unavailable. State-law directives for both eligibility changes are scheduled to repeal after June 30, 2027, unless the legislature takes further action. Separate from the new proposals, the Five-Year Lifetime Limit and Institutions for Mental Disease requests remain under CMS review as carryover requests (Arizona Health Care Cost Containment System, July 23).