State of the States: Grappling with Healthcare Changes

By Adam Alver, Policy Director

The Big Beautiful Bill and State Healthcare

The passage of H.R. 1 earlier this year, as we discussed in our most recent Word From Washington post, will have major impacts on the healthcare system across the United States. One of the most significant set of changes within the bill broadly affects the way Medicaid works and is funded, particularly at the state level. The changes range from the creation of “work reporting requirements” to the way states tax providers to fund Medicaid programs. Over the coming years, these will all have compounding effects on how patients receive their healthcare and treatments and how states approach their budgets.

Imploding State Budgets

At the passage of the bill in July, there were already at least 10 states facing major budget issues which will be heavily impacted by the changes to Medicaid, shown above. While the federal government’s spending on Medicaid is estimated to decrease by nearly $1 trillion over the next ten years, the impact on different states will vary. The top ten current high-end estimates for decreases in state Medicaid budgets include:

• California – $187 Billion
• New York – $128 Billion
• Illinois – $57 Billion
• Pennsylvania – $57 Billion
• Washington – $46 Billion
• Arizona – $43 Billion
• Ohio – $41 Billion
• Michigan – $40 Billion
• Texas – $40 Billion
• New Jersey – $36 Billion

Because of these significantly decreased budget forecasts, legislators across the country have already begun discussions on how to manage decreased budgets, both from healthcare system changes and other tax changes included in H.R. 1. For example, Colorado entered a special legislative session on August 21 to deal with an estimated $750 million budget loss, and lawmakers in New Mexico discussed how to handle their 878,000 Medicaid enrollees who may lose coverage, which the state will need to try to protect. As the bulk of the changes begin to take effect over the next five years, the continuing ripple effects will be closely watched by national health organizations and our staff at HFA.

State Implementations of Work Reporting Requirements

Currently under discussion in many states around the country are the work reporting requirements included in H.R. 1. These requirements will make it harder for patients to prove their eligibility for coverage, and in some states that previously tried implementing these requirements, like Arkansas, they resulted in 18,000 adults losing coverage and no substantial increases in employment.

After H.R. 1 became law in July, the Center for Children and Families (CFF) at Georgetown University’s McCourt School of Public Policy conducted a study and found that more than half of states in the country are poorly prepared to implement these requirements, including the following states that indicated the greatest levels of risk:

• Illinois
• Missouri
• Montana
• North Dakota
• New Mexico
• Utah
• Wisconsin

Despite these potential challenges, some states are already beginning to work on their implementation plans, because under the law, states are allowed to start their programs before the official nation-wide date of January 1^st, 2027. As of this article’s publication date, Georgia is the only state with active work requirements, although Utah, Arizona, Iowa, Arkansas, Ohio, and South Carolina have all submitted waivers to the Department of Health and Human Services to begin their programs. 

Given the short timeframe that states will have to implement these requirements, it is likely that significant difficulties are on the horizon for state Medicaid programs and our patients who use them. It will be very important to stay informed about your state’s progress toward these requirements and any changes that may impact your care and treatment moving into 2026 and 2027.

You can track your state’s readiness to implement the changes under H.R. 1 at the CFF’s tracker, and you can also find your state-specific name for its Medicaid and CHIP programs.

Premium Increases and Premium Tax Credits

Aside from the coming changes to America’s healthcare structure, health insurance premiums for Marketplace plans (which were created under the Affordable Care Act) are set to increase. If you typically purchase insurance through your employer and are unfamiliar with the Marketplace, these are the plans available during open enrollment at Healthcare.gov.

While several variables are at play in determining premiums, there are two significant factors influencing this year’s increases. The first is the implementation of tariffs, which, while unlikely to directly increase costs for bleeding disorder patients, have increased the total expenses for the insurer to cover all of its enrolled members. Because of this, increases in pricing for pharmaceutical imports will carry over to plan premiums for enrollees, with one estimate showing a 3% increase from tariffs alone. 

Second, and much more significant, is the coming expiration of the enhanced premium tax credits. These credits are available as a discount on an insurance plan at the time of purchase, applied over the course of the plan year, with the level of discount available being determined by the enrollee’s estimated income for the coming year.

There are two main parts to these premium tax credits. The first is known as the Advanced Premium Tax Credit (APTC), which was created as part of the Affordable Care Act in 2010, and first made available to Americans in 2014. The second part is known as the Enhanced Premium Tax Credit (ePTC or eAPTC), which was created during the COVID-19 pandemic to help ensure people didn’t lose health coverage. The enhancement expanded eligibility for the tax credit above 400% of the federal poverty line, allowing millions more Americans to afford healthcare coverage, capping premium costs at 8.5% of their income. It also decreased overall expenses for those under 400% of the federal poverty line who had already been eligible.

Despite the benefits and increased coverage, Congress must re-authorize the expanded tax credits every year, otherwise the eligibility rules will return to their original levels, meaning that individuals and families earning above 400% of the federal poverty line will no longer be able to receive it, and those below 400% of the federal poverty line will face increased costs. The current deadline for Congress to continue this enhancement is December 31^st, 2025; however, many health plans have already included a discontinuation in their rates for 2026.

Overall, the most recent estimates from Peterson-KFF show a median premium increase of 18% in 2026, with some plans much higher than this. The expiration of the enhanced tax credits will also decrease financial assistance for all marketplace plans, and average costs will increase by approximately 75% for out-of-pocket payments.

Extending the enhanced Premium Tax Credits remains one of HFA’s top priorities alongside our national partners and many other patient groups, and we encourage patients across the country to stay up to date on their upcoming healthcare premiums under the marketplace.

Your Role in Our Continued Work

HFA’s efforts need amplification from your stories to protect and empower the entire bleeding disorders community. Raise your voice to be heard with HFA today by:

• Joining HFA’s Advocacy Network
• Protect Access to Life-Saving Care—Tell Congress to Extend the Enhanced PTC!

Also, be sure to stay up to date with our next Word from Washington post and State of the States posts, and encourage your friends, family, and local bleeding disorders chapter to support us in this work!