Weekly StateVitals Update: Volume 3 (January 21, 2025)
Arkansas
Governor Huckabee Sanders to prioritize Medicaid work requirements. Following similar comments from other Republican Governors this week, Governor Sarah Huckabee Sanders (R) expressed her support for Arkansas to pursue work requirements for Medicaid recipients. However, unlike the last time the state pursued work requirements, the Governor has called for implementing work requirements for both the expansion and traditional Medicaid populations. Despite the state’s original work requirement program having been blocked from continuing under a federal court ruling, the Governor believes this Administration would approve this new type of expanded request. Arkansas was the first state to implement work requirements with nearly 23% of the expansion population losing Medicaid coverage over the first 7 months for the first phase-in population (expansion eligible individuals between ages 30 and 49).
When Alabama applied for an 1115 demonstration amendment to implement work requirements for Medicaid traditional recipients during the first Trump Administration, the Centers for Medicare and Medicaid Services (CMS) never approved the request. It’s unknown whether the incoming CMS leadership would consider such a request through an 1115 demonstration amendment. Undoubtedly, it would likely spur a challenge through the judicial process.
Georgia
Governor Kemp proposes changes to the Pathways to Coverage program. Governor Brian Kemp (R) unveiled proposed changes last week to the state’s Medicaid expansion program, Pathways to Coverage. Highlighting the changes includes expanding eligibility to parents and legal guardians with incomes at or below 100 percent of the Federal Poverty Level (FPL) with children ages 0 to 6. The intent is to ensure that new mothers have stability of coverage after their one-year postpartum period comes to an end, in addition to rendering coverage to new fathers. After launching in July 2023, the program has covered 8,385 new residents, falling relatively short of initial expectations. Participants in the program are required to document 80 hours of work, volunteering, education or other approved activities per month. It is currently the only Medicaid program in the country with a work requirement.
Indiana
Senate Republicans release 2025 policy agenda. Last week, the Indiana Senate Republicans released their policy agenda for the 2025 legislative session. As part of their agenda, SB 2 would cap enrollment in the state’s Medicaid expansion program to 500,000 members and implement work requirements. Additionally, it would enhance oversight and accountability pertaining to Medicaid eligibility, resulting in an increased frequency of redeterminations. For hospitals it would establish a responsibility when making a presumptive eligibility determination and impose corrective action and restrictions for failing to meet presumptive eligibility standards. SB 3 would require that any third-party administrator, pharmacy benefits manager, or insurer acting on behalf of a plan sponsor has a fiduciary responsibility to the plan sponsor, a request from the business community. Similar to previous years, these priorities by the Senate Republicans are largely messaging in nature but frequently do clear the chamber in some form or other. Given a policy agenda by new Governor Mike Braun (R) that heavily emphasizes healthcare reform, it’s increasingly likely that the Legislature will consider some significant healthcare reform this session.
Iowa
Governor Reynolds addresses Medicaid and healthcare workforce in State of the State address
Gov. Kim Reynolds (R) called for increased investment in the healthcare workforce as part of her annual state of the state address. The Governor is calling to increase the state’s physician student loan repayment program to $10 million for providers willing to work in rural Iowa for five years and the nursing grant program to pay for educational costs to $3 million. Additionally, the Administration intends to secure in excess of $150 million in federal funds to create 115 new residency slots at the state’s 14 teaching hospitals. Given the substantial cost to the federal government and a lack of appetite for federal appropriators to increase funding on healthcare, it’s unknown whether efforts related to additional graduate medical education dollars will be successful.
The Governor also highlighted that the state will request federal approval to receive Medicaid rate flexibility intending to create regional partnerships that share a pool of resources for providers. Additionally, increased rates for labor and delivery for OB-GYNs and nurse midwives and to add doula services as a covered Medicaid benefit will also be formal proposals. Finally, the Governor noted that she will request the federal government for approval to implement work requirements for able-bodied adults. Given the emphasis on Medicaid, it’s almost assured that a Medicaid omnibus in some form or fashion will be considered this session with the Legislature.
New Hampshire
Insurance Commissioner backs surprise billing legislation. State Insurance Commissioner D.J. Bettencourt is supporting a measure (HB 316) with Rep. John Hunt (R-Rindge) to prohibit surprise billing for ground ambulance transportation services. It would also authorize development of a default rate schedule that insurers must pay ambulance providers they are not contracted with. This move comes after the Insurance Department released a report earlier this year which recommended prohibiting balance billing and recommended a default rate of 202 percent of Medicare. The New Hampshire Ambulance Association would prefer the Legislature consider HB 185 to address the problem, which would allow providers to negotiate a rate with insurers or allow the Insurance Department to intervene if the insurer views any required rate by the provider as unreasonable. A subcommittee was scheduled for this week to work on both bills but that meeting has since been cancelled.
Despite the federal No Surprises Act, which went into effect in 2022, largely restricting the practice of surprise or balance billing of consumers, one area that was left unaddressed was ground ambulance services. It left states to pick up any regulatory oversight or limitations on balance billing for ambulance services. At least 18 states to date have some limitations on balance billing from ambulance providers.
New Jersey
State to stockpile abortion pills. During his annual state of the state address, Gov. Phil Murphy (D) announced the state’s plan to stockpile medications frequently used in abortions. Specifically, Gov. Murphy highlighted Mifepristone as one drug that he intends to direct the state to stockpile in advance of the new federal Administration taking office. In addition to stockpiling, the Governor called on the Legislature to eliminate cost-sharing on abortion-related services. New Jersey joins both Massachusetts and California in stockpiling Mifepristone. Despite continued state action to stockpile such prescription drugs, stakeholders are still being warned that the new Administration may examine how to limit said stockpiling via federal mechanisms. Alternatively, other states, like Connecticut, have confirmed they have no plans to stockpile the drug.
New Mexico
Democrats propose a 5.7% general fund increase, with investments in healthcare. As New Mexico experiences continued revenue windfall from petroleum production, lead budget writers have proposed a $577 million increase in state spending for the next fiscal year. Notably, spending on healthcare – and largely Medicaid – is budgeted to grow by 27 percent, which is largely due to a new assessment on hospitals to draw down additional federal dollars. The other significant healthcare investment is related to behavioral health and substance use disorders (SUDs). Legislative budget writers want to identify more evidence-based practices to address SUDs, inclusive of investment in distribution and administration of methadone and buprenorphine for at-risk populations and specifically targeted at Medicaid enrollees. At the same time, the budget proposal reflects an investment in healthcare workforce, particularly in rural areas, through rural healthcare delivery grants of which over $100 million has been spent in recent years. Governor Lujan Grisham (D) has offered her own proposed budget with mostly aligned goals and intent albeit a slightly increased spending plan increase of 7 percent. Despite most states feeling revenue pressure following the end of pandemic-era federal relief, New Mexico is uniquely situated with an unreplicable revenue stream from other states and implementation of a new hospital assessment occurring simultaneously.
North Carolina
Governor Stein issues new reproductive healthcare protections. Governor Josh Stein (D) issued Executive Order No. 8 last week with the intent to bolster protections for accessing abortion services in North Carolina. Notably, the Executive Order is focused on protecting an individual’s medical privacy when seeking such services. It prohibits any Cabinet-level agency from providing patient medical records, patient-level data, patient billing information or any other information and any use of state time, money or resources to assist in an investigation or proceeding intending to impose liability or professional sanction against a person or entity assisting another individual in providing reproductive healthcare services. It also prohibits agencies from complying with extradition requests for rendering assistance to others outside of North Carolina or of providers outside of North Carolina rendering assistance to residents in the state. The Executive Order stays in effect until repealed, replaced or rescinded. This action comes after the Governor expects both the federal administration and the state’s Republican-controlled Legislature to attempt to drive further restrictions on reproductive healthcare in the state.
Virginia
House Committee advances PDAB legislation. The Virginia General Assembly is off to a fast start with the House Committee on Labor and Commerce passing HB 1724 out of committee on a party-line favorable vote. Not amended in committee, the legislation would establish upper payment limits (UPL) for up to 12 drugs annually between 2026 and 2029. Those UPLs would be applicable to state-sponsored and regulated health plans. Additionally, a stakeholder council, similar to other states, would be established to assist the PDAB with the provision of additional input and pricing data from manufacturers. Opponents to the measure continue to contend such efforts would stifle innovation and research and development and may create an environment that a manufacturer is unable to sustain operations and distribution within. Republicans in the General Assembly are holding steadfast in their support of the Governor’s veto of nearly identical legislation enrolled last year. The bill next heads to the House Appropriations Committee for consideration.
West Virginia
Governor Morrisey authorizes religious exemptions for public vaccine requirements. As one of his first actions, Governor Patrick Morrisey (R) issued Executive Order No. 7-25 this past week which amends one of the strictest vaccine requirements in the country. The Executive Order authorizes an exemption process for students who hold a sincere religious belief that contradicts adhering to the state vaccine requirement necessary for students to be admitted to public schools. The religious exemption would authorize exemption from requiring children to receive vaccines for chickenpox, hepatitis-b, measles, meningitis, mumps, diphtheria, polio, rubella, tetanus, and whooping cough. Prior to the Executive Order, West Virginia was one of only a few states that limited an exemption pathway for only medical reasons. Despite significant attention being drawn to vaccine mandates as a result of the COVID-19 Public Health Emergency, West Virginia never formally adopted in rule or statute a requirement of COVID-19 vaccination for school admittance.
Wisconsin
Wisconsin Supreme Court hears oral arguments on state administrative rulemaking process. Last week, the Wisconsin Supreme Court heard arguments as to whether a legislative decision to reject a state agency rule banning conversion therapy for LGBTQ+ individuals was unconstitutional. In Wisconsin, similar to a few other states, the Legislature has a Joint Committee for the Review of Administrative Rules (JCRAR), an entity that is controlled by the majority party and is the final sign-off on approving state agency regulations. Under Governor Tony Evers (D) administration, the Department of Safety and Professional Services submitted final rulemaking to JCRAR banning the practice. JCRAR blocked the rule by temporarily suspending its implementation. In 2023, Gov. Evers filed suit claiming the JCRAR mechanism for final approval on state rulemaking was unconstitutional.
In oral arguments, representation for the Evers’ Administration asked the Court to overrule past precedence and current government practices based on constitutional intent of the role between the Legislature and the Executive branch. While the issue at hand pertaining to conversion therapy is important, the other question at play is how the Supreme Court interprets the legal question of whether a legislative body should have final approval of a separate branch of government’s authority. If the Court agrees with the Evers’ administration that it shouldn’t, it may kick off the same questions in other states.
