Michigan is preparing for significant Medicaid and budget changes under the 2025 federal budget reconciliation law (P.L. 119-21, OBBBA), with more than 200,000 residents at risk of losing healthcare coverage. At the 2026 Michigan State of Reform Conference, state leaders and stakeholders highlighted implementation challenges, fiscal pressures, and strategies to maintain access to care.
On May 5, 2026, State of Reform (SOR), an HMA Company, hosted its annual Michigan health policy conference, bringing together over 200 interest-holders, including providers, policymakers, and community-based organizations to examine how Michigan is adapting to rapid change and implementing new federal requirements.
The conference fostered candid discussion of the implications of the 2025 federal budget reconciliation act (P.L 119-21, OBBBA), with a particular focus on community engagement requirements, behavioral health, Michigan’s budget outlook, and the Rural Health Transformation Program (RHTP).
Michigan DHHS’s Top Health Policy Priorities in 2026
The day opened with a presentation from Meghan Groen, Chief Deputy Director of the Michigan Department of Health and Human Services (DHHS). Ms. Groen shared her department’s priorities and strategies, including implementation of OBBBA requirements and RHTP.
Medicaid community engagement requirements and six-month eligibility redeterminations are the most immediate operational challenges for DHHS. Michigan also is advancing a set of readiness activities, including internal assessments, coordinated planning, leadership alignment, and regular communication with the Centers for Medicare & Medicaid Services (CMS).
Another top priority Ms. Groen identified was expanded access to behavioral health. In a discussion focused on programmatic changes in behavioral health, panelists discussed how Michigan is using multiple tools, including Certified Community Behavioral Health Centers (CCBHCs), crisis stabilization units, and psychiatric residential treatment facilities (PRTFs), to address access gaps. Panelists Kristen Morningstar, Director of Michigan’s Bureau of Specialty Behavioral Health Services and Robert Sheehan, Chief Executive Officer, Community Mental Health Association of Michigan, shared how DHHS continues to collaborate with behavioral health providers to optimize service delivery and better meet member needs.
How OBBBA Will Affect Michigan Medicaid Coverage and the State Budget
Across sessions, speakers—including Danielle Devine, Market President at McLaren Health Plan, and Jen Flood, Budget Director for the State of Michigan—highlighted how OBBBA is already reshaping Michigan’s Medicaid program and broader fiscal outlook. These changes have direct implications for Medicaid financing and long-term planning and are a driver for the state’s $1 billion budget shortfall. Significantly, Michigan Gov. Gretchen Whitmer has recommended approximately $800 million in new taxes from tobacco and vaping to supplement the budget. The governor has also formed a working group of hospitals, health plans, providers, and other stakeholders to identify options for saving $150 million.
DHHS projects that more than 200,000 individuals in Michigan are at risk of losing Medicaid coverage. Panelists discussed the downstream effects, including disruptions in care, a rising rate of uninsured residents, and increased financial strain on families and providers. Stakeholders shared concerns about increases in uncompensated care, food insecurity, and household debt.
Panelists emphasized that navigating this environment will require close collaboration across the delivery system.
How Michigan Is Using the Rural Health Transformation Program
Amid the broader changes in the healthcare landscape, RHTP is emerging as a key strategy for sustaining and strengthening access to care in Michigan’s rural communities. Speakers such as Lauren LaPine-Ray, DrPH, MPH, Vice President, Policy & Rural Health at the Michigan Health & Hospital Association, emphasized the importance of aligning financing strategies, partnerships, and policy levers to optimize the impact of these investments. Michigan has already awarded RHTP funding to multiple entities to support implementation at the local level.
Looking Ahead
The challenges that Michigan is facing are not unique, and the need for shared insight and practical solutions is only growing.
If you are looking for strategies and solutions to address urgent healthcare policy and operational challenges, HMA experts are available to help navigate these complex changes and identify practical paths forward.
Health Management Associates (HMA), State of Reform brings together state leaders, providers, plans, and community organizations to surface real-world strategies for navigating federal change. Join us in Baltimore, MD, on May 21, 2026, or visit the SOR website to view the full conference schedule and register for an upcoming event.
State of Reform develops its conference agendas through collaboration with HMA subject matter experts/market leads and stakeholders across the public and private sectors, including state officials, community-based organizers, providers, payers, and more.