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Preparing for Change: A Look at Proposed State Fiscal 2027 Budgets

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As of January 1, 2026, nine governors had released proposed budgets for state fiscal year (SFY) 2027. With the phase down of federal funding and substantial policy changes approved in the 2025 budget reconciliation act (P.L. 119-21, OBBBA), these proposals offer insights into how governors plan to manage mounting fiscal pressures, navigate new federal mandates, and position their programs for long-term sustainability. 

Today, Health Management Associates Information Services (HMAIS) published its first preliminary review of proposed SFY 2027 budget proposals. The initial installment includes budgets from Alaska, Colorado, Florida, Mississippi, New Mexico, South Dakota, Utah, Virginia, and Wyoming, with the latter two proposals covering the fiscal 2026–28 biennium. 

HMAIS will release periodic updates as additional governors publish their budget proposals—the same rolling approach we used in 2025 (here and here). Because 15 states enacted 2025–27 biennial budgets last year, HMAIS also might review substantial mid-biennium health-related adjustments or supplemental funding. 

The remainder of this article provides a snapshot of several notable themes and emerging trends detailed in the full report. 

Implementation of New Federal Requirements 

State leaders are preparing budgets for SFY 2027 at a time of heightened fiscal stress and structural uncertainty. Entering 2026, governors are facing reductions in federal funding, particularly in Medicaid and Supplemental Nutrition Assistance Program (SNAP) funding. In addition, they are preparing for new federal requirements that will begin to take effect later this year, including narrower flexibilities for financing and Medicaid community engagement policies and more frequent eligibility redeterminations. 

Against this backdrop, governors are using FY 2027 budget proposals to comply with OBBBA’s mandates and to stabilize their safety net programs and realign state operations around stricter fiscal realities. 

Medicaid Work Requirements. Virginia’s proposed budget includes funding to implement federal Medicaid community engagement requirements, including a recommendation to add nine new authorized positions in SFY 2027 and 12 more in fiscal year 2028 to meet workload demands. In addition, South Dakota’s governor proposed amending the state’s 2026 budget to secure funding to implement these requirements. 

Eligibility and Redetermination. Several governors are proposing investments to support heightened eligibility checks across Medicaid, SNAP, and Temporary Assistance for Needy Families (TANF). For example, Colorado Gov. Jared Polis’s budget proposes $19.1 million to improve the state’s eligibility system for programs such as Medicaid, SNAP, and TANF. Utah’s proposed budget includes a recommended allocation of nearly $16.5 million to the Department of Workforce Services for “H.R. 1 Medicaid Eligibility Administration,” and nearly $10 million for the “H.R. 1 SNAP Administrative Services.” 

SNAP Changes. States are backfilling lost federal funding and investing in error reduction and system modernization. New Mexico Gov. Michelle Lujan Grisham’s proposed budget, for example, includes $37 million to replace the decrease in federal funding for SNAP administration ($4 million of which will support 150 new full-time positions), as well as $8.9 million for systems improvements to reduce payment errors in SNAP. South Dakota Gov. Larry Rhoden’s proposed budget includes $5.5 million to offset a reduction in SNAP federal funding. 

Strategic Cost Containment 

Considering OBBBA implementation and the effects that it will have on their budgets, our first review of governors’ budget proposals signals that states are taking an aggressive posture toward limiting expenditure growth in 2026 and 2027. Initial proposals include targeted reductions, tighter utilization management, and restrictions on benefits. 

Since the 2025 legislative session, Colorado has taken multiple steps to prepare for declining federal revenue. For example, Governor Polis’s proposed budget accounts for multiple actions approved through an amended executive order that would reduce spending to brace for OBBBA’s impacts. Examples include: 

  • Reducing provider rates to 85 percent of the Medicare reimbursement rate 
  • Establishing limits on Community First Choice services 
  • Adjusting the home health nursing and therapy services payment methodology 
  • Introducing cost controls for Medicaid benefit categories that have shown disproportionate growth 
  • Implementing a $3,000 annual cap on adult Medicaid dental benefits and a $750 annual cap on dental benefits for individuals in the Cover All Coloradans program 
  • Changing the Cover All Coloradans behavioral health program from managed care to fee for service 
  • Reviewing provider fees in anticipation of possible State Directed Payment approval from the Centers for Medicare & Medicaid Services (CMS) 

Former Virginia Gov. Glenn Youngkin’s budget—now inherited by Abilgail Spanberger following her inauguration January 17, 2026—includes multiple cost-containment proposals, such as: 

  • Anticipated adjustments to capitation rates after a review of Medicaid managed care organizations 
  • A $2,000 annual limit on adult dental services Medicaid coverage 
  • Elimination of both automatic rate increases for psychiatric residential treatment facilities and qualifying addiction and recovery treatment services providers and automatic biennial inflation increases for medical assistance providers 
  • Restrictions on emergency maternity services to Medicaid enrollees who are ineligible for Medicaid because of their citizenship status 
  • Standardized hourly limits across home and community-based services waivers 
  • Actions related to “ensuring appropriate utilization” of services, such as applied behavioral analysis and crisis services 

States are expected to include additional cost-containment tools throughout 2026 and beyond as OBBBA’s fiscal effects become clearer over the coming months and years. 

What to Watch 

The budget proposals indicate the resources that executive agencies need and preview governors’ policy agendas for the year ahead. Stakeholders should track program reductions and rate changes, eligibility system investments, and shifts in care models. 

In addition, some of the announced budget proposals consider federal awards to states under the Rural Health Transformation Program (RHTP). For example, the Alaska Department of Health budget request addresses the state’s RHTP implementation plans, and Wyoming’s budget proposal outlines RHTP priorities. Many states are preparing RFP processes to operationalize their RHTP strategies and make progress on the goals of their initiatives. 

Connect with Us 

As federal funding uncertainties continue, states and other stakeholders will need to adapt their delivery systems, administrative structures, and financing models throughout OBBBA’s multiyear rollout. HMA offers expertise, analytics, and strategic advisory services needed to navigate this evolving landscape. For details contact Andrea Maresca and Kathleen Nolan. 

The full state of the states and governor budget report is available to HMAIS subscribers. In addition, HMAIS maintains a Rural Health Transformation Program (RHTP) Tracker that incorporates details of each initiative and the first year award.  

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Outlook 2026: ACA Marketplace Trends–A Conversation with Michael Cohen and Zach Sherman

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As the 2026 Affordable Care Act (ACA) Marketplace open enrollment period nears its close—and with enhanced subsidies expiring, rates shifting, and consumer behavior evolving—questions about enrollment stability, affordability, and operational readiness have rapidly moved to the forefront. Andrea Maresca, Senior Principal, at Health Management Associates, caught up with Zach Sherman, Managing Director for Coverage Policy and Program Design at HMA, and Michael Cohen, PhD, who leads much of the federal policy analysis advanced by Wakely, an HMA company, to unpack what they’re seeing so far.

Q: This year’s open enrollment period has been unusually complex. At the federal level, what stands out most so far? 

Michael: The headline is that new enrollment is down sharply, while returning consumers have held steadier than expected. That reflects the reality that the enhanced subsidies are gone, premiums have risen, and consumers are facing higher net costs across nearly every market. 

But nuance matters: The real question now is how many of these plan selections will effectuate—meaning consumers pay their first month premium, and how many will stay enrolled the entire year? Average effectuated enrollment throughout the year is what truly determines 2026 risk mix and market stability. 

Q: Enrollment appears to vary considerably from state to state. What are you hearing from state partners? 

Zach: It’s a tale of two markets. StateBased Exchanges (SBEs) are generally seeing less attrition and, in some cases, even modest increases in plan selections. The reason is simple: Many states are doing a lot of heavy lifting to offset the loss of federal support. 

For example, SBEs perform earlier and have more customized outreach. We’ve also seen some states step in and offer state-funded subsidies, which are cushioning the affordability loss in places like New Mexico, Maryland, and California. 

While still early, the data suggest that states with heavy investment in awareness and enrollment assistance, operational support, and affordability are weathering the transition better because they have more tools to stabilize the consumer experience. 

Q: There’s been a lot of speculation about how consumers are responding to the end of enhanced subsidies. What are the early signs? 

Michael: Consumers appear to be buying leaner benefits or different metal tiers to manage premium increases. 

Another underrecognized but incredibly important dynamic is that autoreenrolled consumers may not effectuate coverage once they see the final outofpocket premium. That dynamic won’t be fully understood until March, April, and even May. 

Q: Idaho is a particularly interesting early case study. What are you learning from the first state to complete enrollment? 

Zach: Your Health Idaho’s open enrollment finished on December 15, and while they saw a slight increase in plan selections, state officials are not celebrating as they expect a large wave of cancellations—up to 20,000—due to the expiring subsidies. 

That’s the clearest early indication that affordability is the defining issue of 2026. States are preparing for higher-than-usual enrollment attrition in quarters one and two (Q1 and Q2), and they’re thinking hard about customer service capacity as consumers navigate changing net premiums, increased deductibles and out-of-pocket costs, and nonpayment grace periods. 

Q: Are there policy levers states can still pull to mitigate affordability challenges going forward? 

Zach: We’re seeing states explore options for mitigating affordability gaps and enrollment losses, including through state subsidy programs and increased investment in existing reinsurance programs. SBEs are also leaning on their core competencies—tailored and specific education campaigns and enrollment and plan comparison tools—to help their customers cut through the noise and navigate to the best option within their budget.  

These aren’t perfect or quick fixes and most states don’t have the resources necessary to backstop the expiring subsidies, but state leaders increasingly view doing something as necessary to stabilize their markets. 

Q: What should health plans, exchanges, and policymakers watch most closely over the next three months? 

Michael: Effectuation, effectuation, effectuation. The composition of the effectuated population will define 2026 risk. 

Zach: Agree. In addition, future regulatory action on affordability, eligibility and enrollment processes, and program integrity. The federal government is expected to issue its annual payment notice, the proposed 2027 Notice of Benefits and Payment Parameters, in the near future. 

You can find more insights on the initial enrollment patterns to date in this Health Management Associates-Wakely paper, Individual ACA Open Enrollment Insights So Far and register for the 2027 ACA Considerations: Proposed NBPP and Other Key Changes and Trends.  

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Outlook 2026: Rural Health Transformation Program

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As we kick off the new year, Health Management Associates (HMA) is launching a new series of brief, insightful interviews with our policy experts on issues that will define 2026—what’s changing, why it matters, and how federal, state, and industry decisions will shape what happens next. Building on our earlier analysis of the Rural Health Transformation Program ((RHTP), here and here), this week, we start with a pointed look at the Centers for Medicare & Medicaid Services’s (CMS) first year of RHTP awards. 

Rural Health, Ready or Not: CMS Wants Results in 2026

An interview with Kathleen Nolan, Senior Advisor, HMA, and Sara Singleton, Principal, Leavitt Partners, an HMA Company. 

Q: What do the new Rural Health Transformation Program awards tell us about US Department of Health and Human Services (HHS) and CMS priorities heading into 2026? 

Kathleen Nolan: One of the clearest signals is that CMS expects visible progress in 2026. This is not a program that gives states months of planning runway. The application made it clear that CMS wants states to start doing the activities they proposed right away—not just planning or propping up existing systems. CMS wants to see meaningful movement on implementation in 2026, especially in the areas of workforce, infrastructure, technology modernization, and care delivery redesign. 

Sara Singleton: Exactly, and CMS is using this investment to reinforce some of the administration’s broader policy goals. Many state proposals leaned heavily into chronic disease prevention, chronic care management, and expanding supports that promote healthier lifestyles. That alignment isn’t accidental. The Administration is looking for real traction on these priorities, and RHTP gives states both the resources and the accountability framework to make progress. So, the message from CMS is clear: Move quickly, implement strategically, and show early gains in the areas that matter for long-term population health. 

Q: Was anything in the awards themselves surprising? 

Singleton: There was a lot of speculation about how wide the spread in funding levels might be, particularly for states’ discretionary initiatives. But the distribution was relatively tight; 32 states fell in the “average” range of $190‒$230 million, with only four states above $230 million and 13 below $190 million. That suggests CMS isn’t signaling dramatic differences in expected performance or ambition. 

Nolan: It reinforces that CMS is looking for consistent, measurable progress from every state. States that struggle to implement their plans could see less funding in about years. 

Q: What should states keep top of mind heading into year one? 

Nolan: Accountability. CMS has made it clear they will adjust budgets in later years if states don’t meet expectations on reporting and evaluation. That also means states need to know where the dollars are going and what they are getting for the investment. Year one performance really matters. 

Singleton: And it’s not just CMS. Congress and the Office of Inspector General for HHS will also be watching how states use these funds. 

Q: What rural health policy developments are you watching in early 2026? 

Nolan: Decisions about the leadership for these initiatives and state legislatures. Federal investment can only go so far. States will need strong leaders and supportive policies to accelerate and sustain RHTP efforts in year one. What legislatures choose to prioritize will shape the impact of RHTP far beyond year one. 

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Tracking Medicaid’s Growth: FFY 2025 Spending and T-MSIS Data Provide Insights on Managed Care Spending

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This week, our In Focus section highlights findings from a Health Management Associates Information Services (HMAIS) analysis of the Centers for Medicare & Medicaid Services (CMS) preliminary CMS-64 Medicaid expenditure report for federal fiscal year (FFY) 2025. The data show total medical services expenditures reached $971.4 billion across all states and territories, up 6.9 percent from FFY 2024. 

This CMS-64 spending detail provides important context as states prepare for their upcoming legislative sessions and begin implementing changes required under the 2025 budget reconciliation act (P.L. 119-21, OBBBA). Early fiscal and operational pressures will stem from changes to the Supplemental Nutrition Assistance Program (SNAP) and preparations for community engagement requirements for Affordable Care Act (ACA) Medicaid expansion enrollees. In subsequent years, pressures will intensify because of major changes to provider tax financing and new federal limits on state directed payments in 2027 and early 2028. 

In this article, we provide a deeper review of Medicaid spending, including the federal-state financing split. As Medicaid agencies prepare for upcoming spring sessions and anticipate potential program changes under OBBBA, it is notable that nearly two-thirds of Medicaid directors report an at least fifty percent likelihood of a Medicaid budget shortfall in FFY 2026. 

Growth and Drivers in Medicaid Managed Care Spending 

The HMAIS analysis looks at CMS-64 preliminary estimates of Medicaid spending by state for FFY 2025. CMS tracks state expenditures through the automated Medicaid Budget and Expenditure System/State Children’s Health Insurance Budget and Expenditure System (MBES/CBES). 

While enrollment decreased for most states following the COVID-19 public health emergency unwinding, states saw an uptick in expenditures due to increased state directed payments, greater utilization and sicker populations, higher drug costs, increased provider rates, and greater use of long-term services and supports and behavioral health. 

Key findings from HMAIS’ analysis (see Table 1), include: 

  • Total Medicaid managed care spending (federal and state share combined) reached $550.5 billion in FFY 2025, up from $517.5 billion in FFY 2024. 
  • This amount represents a 6.4 percent year-over-year increase from FFY 2024 to FFY 2025. 
  • Managed care accounted for 56.7 percent of total Medicaid spending in FFY 2025, down 0.3 percentage points from the previous year. 
  • The $33 billion increase from FFY 2024 to FFY 2025 exceeds the $9.4 billion increase seen the year prior, reflecting renewed growth following the unwinding transition period. 

These figures include spending on comprehensive risk-based managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), and prepaid ambulatory health plans (PAHPs). PIHPs and PAHPs refer to prepaid health plans that provide a subset of services, such as dental or behavioral health care. This total is exclusive of fee-based programs such as primary care case management models. 

Table 1. Medicaid MCO Expenditures as a Percentage of Total Medicaid Expenditures, FFY 2020–2025 (in millions) 

Annual Medicaid managed care expenditures have grown consistently with total Medicaid expenditures. After slower growth in FFY 2024—which aligned with the post-COVID-19 policy unwinding period when many states completed eligibility redeterminations—FFY 2025 again experienced an uptick in managed care growth (see Figure 1). 

Figure 1. Total and MCO Medicaid Expenditures, FFY 2020–2025 ($M)

Federal versus State Share Spending 

The preliminary FFY 2025 expenditure data provides a baseline before OBBBA’s changes are scheduled for implementation and as states continue to face Medicaid funding challenges. In FFY 2025, federal funding accounted for 64.2 percent of FFY 2025 spending, and non-federal matching funds accounted for 35.8 percent (see Table 2). Particularly later in 2027, 2028, and subsequent years, Medicaid expansion states stand to see disproportionally larger increases in their share of spending. 

Table 2. Federal versus State Share of Medicaid Expenditures, FFY 2020–2025 (in millions)

T-MSIS Data Adds Detail to CMS-64 MCO Spending 

To complement CMS-64 macro-spending trends, HMA developed a methodology allowing us to use Transformed Medicaid Statistical Information System (T-MSIS) data to approximate managed care spending by service category. Although T-MSIS enables more granular views (e.g., professional services, inpatient/outpatient hospital services, skilled nursing facilities (SNFs), HCBS, clinics, pharmaceuticals), the most recent dataset typically lags one to two years behind CMS-64 totals. 

HMA’s analysis of the T-MSIS data shows that while managed care remains the dominant delivery system model for Medicaid, spending by provider types helps contextualize the CMS-64 report. Notably, the CMS-64 reports FFY25 data and our report below on T-MSIS disaggregation uses 2023 data. Although the T-MSIS and CMS-64 data are for different years, it still highlights the main components of the largest spending component of the CMS-64 with more recent data. 

The 2023 T-MSIS analysis shows the following: 

  • Professional fees are the lead spending category, with nearly 30 percent of spending directed toward payments to physicians and other practitioners (e.g., physician assistants, nurse practitioners). Given that T-MSIS data are built around billing codes, services that traditionally may be considered part of a bundled rate (i.e., a large portion of physician services delivered in hospitals and clinics) are essentially unbundled and considered professional fees. 
  • Hospital spending (inpatient plus outpatient), SNF costs, and professional fees together account for close to 75 percent of spending in CY 2023. 

Figure 2. T-MSIS Medicaid Spending by Service Category 2023 (MCO disaggregated plus FFS)

What to Watch 

Because Medicaid is such a big part of state government spending, outlays for Medicaid will always be a focus and challenge for states. Upcoming state legislative sessions and OBBBA driven changes will begin in 2026 with SNAP pressures and major operational preparations for community engagement requirements for expansion states. Preparations for new limits on provider taxes and state directed payments will likely begin immediately, but the true impacts will occur in 2027 and early 2028. States will need to tailor their programs under funding constraints. 

Connect with Us 

HMAIS, a subscription-based tool that Health Management Associates offers, provides state-by-state analysis of the CMS-64 data, Medicaid managed care enrollment trends, and state budget reporting. For more information about an HMAIS subscription, contact Andrea Maresca and Alona Nenko. For details on T-MSIS data, contact Matt Powers and Shreyas Ramani. 

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Executive Branch Actions Target Drug Affordability in New Pricing Models

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The federal drug pricing landscape continues to undergo significant transformation as executive branch agencies advance an ambitious suite of regulatory and model testing initiatives intended to lower the costs associated with the Medicare and Medicaid programs. In response to ongoing concerns about rising out-of-pocket costs, increasing pressure to align US prices with those paid internationally, and the continued implementation of the Inflation Reduction Act (IRA), federal agencies are reshaping how prescription drugs are priced, reimbursed, and negotiated in federally financed programs. 

The current policy environment reflects a growing emphasis on benchmarking drug prices to those in peer nations, referred to as “most favored nation” (MFN) benchmarks, and accelerating actions that require or encourage manufacturers to offer lower net prices. Health Management Associates (HMA), is tracking these developments in the public payer space, replicating Centers for Medicare & Medicaid Services (CMS) payment methodologies, and modeling alternative policies to assist life science companies, payers, and other stakeholders. 

In this article, we review the administration’s recent efforts to reduce Medicare and Medicaid spending on drugs and biologics, including confidential manufacturer negotiations and three new models that together could reshape pricing dynamics across federal programs. 

Executive Branch Negotiations Seek to Drive Access to MFN Discounts 

In 2025, the administration issued an Executive Order directing federal agencies to pursue strategies to establish MFN pricing, linking US prices for certain drugs to the lowest (or second lowest) adjusted net prices among a targeted set of peer countries. Following the order, federal officials sent letters to 17 major pharmaceutical and biotechnology manufacturers, urging them to negotiate agreements that would voluntarily align prices with MFN-based benchmarks. 

To date, 14 manufacturers have signed agreements, though full details remain confidential. These agreements are understood to accomplish the following: 

  • Provide state Medicaid programs with access to MFNbased discounts 
  • Require that new drugs be launched in the United States at MFNaligned prices 
  • Offer certain drugs at discounted directtoconsumer prices through a forthcoming “TrumpRx” program, expected to launch later this year 

Reports suggest that manufacturers entering these MFN-related arrangements may receive exemptions from several federal actions, including the Center for Medicare and Medicaid Innovation (Innovation Center) demonstration models described below and certain tariff-related policies. 

MFNLinked Models Designed to Lower Drug Costs Across Medicare and Medicaid 

Along with the negotiation efforts, the CMS Innovation Center has proposed three models that would test MFNbased pricing through structured rebate mechanisms. Each model targets different segments of the market while testing how international benchmarks could be integrated into federal drug payment policy. 

New Models Test Alternatives to Inflation Rebates 

Announced in December 2025, the Global Benchmark for Efficient Drug Pricing (GLOBE) Model and the Guarding US Medicare Against Rising Drug Costs (GUARD) Model are designed to test alternative approaches to the Inflation Reduction Act’s (IRA) inflation penalty policies. CMS plans to test the models’ potential for market driven price reductions if manufacturers choose to lower list prices instead of paying MFN-based rebates. 

Key features of the GLOBE Model are as follows: 

  • Applies to 25 percent of Medicare fee-for-service (FFS) beneficiaries using certain Part B drugs 
  • Beginning in October 2026, becomes mandatory for select drugs and targets highspending, physicianadministered Part B categories, excluding products already subject to IRA negotiations, generics, biosimilars, and certain lowspend products 
  • No changes to physician and hospital reimbursement, although beneficiaries expected to see reduced cost sharing 

The GUARD Model will similarly test whether applying MFN-based rebates to Medicare Part D drugs will lower Medicare costs. Key aspects of this model include: 

  • Fiveyear model that would start January 1, 2027 
  • Target therapeutic categories with more than $69 million in annual Part D spending 
  • No impact on plan bids and beneficiary cost sharing 

These models rely on pricing data from 19 countries. Manufacturers that voluntarily submit net price information would trigger quarterly benchmark updates; otherwise, CMS will use a fixed list price based benchmark for the entire pilot period. 

CMS is seeking comments on whether additional categories, for example cell and gene therapies, should be excluded from GLOBE. GUARD is also open for comment through February 23, 2026. 

GENErating cost Reductions fOr US Medicaid (GENEROUS) Model 

The GENEROUS model, expected to begin in 2026, creates a voluntary pathway for state Medicaid programs and manufacturers to enter supplemental rebate agreements tied to MFNaligned prices. MFN pricing under this model is based on the second lowest net price in G7 countries plus Denmark and Switzerland. GENEROUS is also expected to align with pricing commitments negotiated through the administration’s manufacturer agreements. 

Key Considerations and Potential Impacts 

The combined effect of federal negotiations and Innovation Center models could be substantial, though outcomes will depend on manufacturer participation, benchmark stability, and operational feasibility. Key considerations include: 

  • State Medicaid savings, especially the extent to which MFN‑linked rebates exceed existing supplemental rebates 
  • Reduced Medicare beneficiary cost sharing for Part B included in GLOBE 
  • Shifts in manufacturer pricing strategies, including potential changes to US launch prices 
  • Interactions with the IRA, particularly Part D redesign and Part B inflation penalties 

Connect with Us 

HMA experts continue to track the federal drug pricing landscape closely as comments, operational details, and implementation timelines evolve across these initiatives. Our team replicates CMS payment methodologies and models alternative policies using the most current Medicare FFS and Medicare Advantage (100%) claims data. 

For more information and questions about the policies described in this article, please contact our experts below.

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CMS Announces Rural Health Transformation Program Awardees

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On December 29, 2025, the Centers for Medicare & Medicaid Services (CMS) announced the state awards for the Rural Health Transformation Program (RHTP), a $50 billion federal initiative intended to stabilize rural health systems and support transformation. CMS stated that $10 billion will be available each year from 2026 to 2030, and that first-year (2026) state awards average $200 million, with totals ranging from $147 million to $281 million. 

This announcement marks a pivot from planning to execution. In the coming months, states will move rapidly to finalize governance structures, confirm partners, and translate proposed initiatives into operational workplans and measurable outcomes. 

Although CMS announced the overall awards for the first budget year, some states have signaled they continue to work with CMS on initiative-specific budgets and planning. In this article, Health Management Associates (HMA) reviews key themes and early trends based on the application initiatives and what is known about the budgets. 

What the Awards Suggest About State Priorities 

Although each state’s awarded approach reflects local realities, early patterns across awardees’ project abstracts suggest several recurring priorities that may shape implementation activity in 2026. 

1) Building the Data, Analytics, and Interoperability Backbone
A number of awardees prioritized shared infrastructure for interoperability, analytics, performance monitoring, and operational backbone capabilities. Examples include: 

  • Arizona described plans to secure vendors to build secure data pipelines, dashboards, and fiscal tracking tools that meet federal audit standards to support rural transformation. 
  • New Mexico proposed a Rural Health Data Hub to build a statewide health analytics platform that integrates siloed data sources and expands access to timely, actionable information for providers. 
  • Alaska described technology-focused investments to strengthen cybersecurity, facilitate data sharing and interoperability, and expand digital tools (including consumer-facing tools and remote modalities). 

2) Strengthening Maternal Health and Perinatal Care
Many awardees emphasized stabilizing rural maternity access and strengthening perinatal supports through strategies, such as: 

  • Alabama proposed a Maternal and Fetal Health initiative featuring digital obstetric regionalization and telerobotic ultrasound to extend specialty access in rural settings. 
  • Kentucky prioritized maternal and infant health by addressing maternity care deserts, including telehealth-enabled community-based maternal/infant support teams and expanded perinatal care access. 
  • Ohio proposed legislative reforms to allow low-risk birthing centers in rural hospitals as part of its broader strategy to address maternity care deserts and improve rural access to care. 

Why it matters: Rural maternity deserts and workforce constraints remain critical drivers of avoidable complications and adverse outcomes. Approaches piloted in rural settings may inform broader statewide maternity care strategies. 

3) Modernizing Emergency Medical Services and Mobile Care
Several awardees included investments intended to strengthen emergency response and build more reliable rural stabilization capacity. 

  • Alabama proposed statewide emergency medical services (EMS) initiatives, including trauma and stroke routing/diversion improvements and an EMS treat-in-place model for low-acuity patients. 
  • Wyoming emphasized access to “the basics,” including improvements in the ability of hospitals to effectively treat emergencies and ambulance response, alongside incentives for small ambulance services to consolidate around more sustainable regional funding bases. 

Why it matters: EMS and mobile response models can function as connective tissue in rural systems with limited traditional access points. 

Why it matters: Data-sharing infrastructure can enable multi-provider coordination, performance tracking, and the operational foundations needed for sustainable transformation. 

4) Integrating Behavioral Health and Community-Based Supports
Awards also reflected ongoing efforts to expand behavioral health access and improve integration with physical health and community supports. For example: 

  • Alabama proposed to improve behavioral health access by converting Community Mental Health Centers into Certified Community Behavioral Health Clinics (CCBHCs). 
  • Arizona proposed to invest in behavioral health and substance use disorder treatment expansion as part of its Priority Health Initiatives portfolio. 
  • Wyoming included statewide telepsychiatry and crisis intervention services as part of its health outcomes priorities. 

Why it matters: Behavioral health capacity constraints are frequently more acute in rural areas, and integration strategies often require both reliable workforce and technology supports. 

What to Watch Next 

With awards announced, attention will quickly turn to implementation. Stakeholders should have processes to track the following: 

  • State governance decisions (including lead agencies, subawards, and regional structures) and funding opportunities 
  • State partner selection processes (through requests for proposals, vendor onboarding, or other contracting pathways) 
  • Performance measurement and reporting expectations (including metrics and evaluation approaches) 
  • Sequencing of the initiatives and where near-term operational activity is most likely to concentrate 

CMS also signaled near-term oversight and engagement mechanisms, state-assigned CMS project officers, kickoff meetings, ongoing technical assistance, and regular progress updates, along with a planned annual CMS Rural Health Summit. 

Tracking State RHTP Implementation 

The HMAIS team developed a resource to capture available information about state RHTP activities, applications, and initiatives and provide a road map for identifying state-specific proposals, requested funding, governance structures, and other key aspects of state RHTP initiatives. 

Following CMS’s award announcement, HMAIS is updating this Rural Health Transformation Program (RHTP) Tracker to incorporate award-specific details as they become publicly available. The resource includes information about FY26 awards by state and initiatives, links to CMS materials and state-posted implementation documentation, and a consolidated view of emerging themes and trends as implementation accelerates in 2026. 

Looking Ahead 

The award announcement is the beginning of implementation. As states operationalize initiatives in early 2026, organizations that align early to awarded priorities and implementation timelines will be best positioned to support rural-first efforts that deliver measurable and lasting results. 

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2025 Year-End Wrap-Up: ACA Subsidies and What to Expect in 2026

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As 2025 draws to a close, Congress finds itself at a crossroads on several critical health policy issues, with the fate of the Affordable Care Act (ACA) subsidies front and center. The year has been marked by intense negotiations and a flurry of proposals, many of which remain unresolved as lawmakers look ahead to a pivotal January 30 deadline for appropriations spending bills. In this article, policy experts from Health Management Associates (HMA)—including Leavitt Partners, an HMA company—provide a comprehensive wrap-up of Congress’ work on ACA subsidies, executive agency actions, and what stakeholders should anticipate in early 2026. 

ACA Subsidies: A Year of Uncertainty and Political Maneuvering 

The expiration of enhanced ACA subsidies at the end of 2025 has been a focal point for congressional debate. Despite numerous bipartisan groups and a multitude of proposals circulating, consensus has proven elusive. The Senate voted on an ACA-related measure December 11, 2025, but neither the Democrats’ proposal for a three-year extension nor the Republican alternative to replace subsidies with health savings accounts advanced and revise certain other Medicaid policies. 

The situation in the House has been equally complex. House GOP leaders unveiled a healthcare package designed to lower costs, expand association health plans, and increase transparency for pharmacy benefit managers. The package would not extend the expiring enhanced ACA subsidies, and even if the House bill passes, the Senate is unlikely to consider it. In addition, on December 17, House Democrats secured enough support to force a vote on a bill that would provide a three-year extension of enhanced subsidies, although House rules preclude scheduling a vote on the bill until January.  

The prevailing sentiment among policy experts is that no substantial action will be taken before year’s end. 

The White House briefly floated a two-year extension of the enhanced subsidies, but walked back the proposal, signaling fluidity in the policy discussions within the administration and among congressional Republicans. The absence of consensus on both policy and political ramifications has left the ACA subsidy issue in limbo. 

Looking Ahead: January’s Appropriations Deadline and ACA Options 

December 15, 2025, marked the last day for consumers to enroll in ACA coverage policies that take effect January 1, 2026, meaning that for many health insurance purchasers, choices for 2026 are already set. Policymakers are now focused on another deadline for potential ACA subsidy action—January 30, 2026, when temporary funding for the current federal fiscal year expires. It is possible that a solution could be attached to the spending package, potentially affecting 2026 premiums, although operational challenges abound. The most feasible option at this stage would be a premium rebate, which would avoid reopening enrollment but require complex rate adjustments. Any substantive changes to the subsidy structure would demand significant actuarial analysis and could disrupt both health plans and state activities. 

Congressional Dynamics: Appropriations, Extenders, and Policy Riders 

The appropriations process is center stage as Congress approaches the January 30, 2026, deadline. Lawmakers are seeking to continue passing “minibus” packages—small groups of appropriations bills—to avoid another government shutdown. Most Medicare and Medicaid policy priorities, including must-pass extenders like telehealth flexibilities and the hospital at home program, are dependent on appropriations vehicles to advance. If Congress resorts to a stopgap continuing resolution, only the most essential extenders are likely to be included, with broader policy riders at risk of being sidelined. 

Policy Outlook 

Pharmacy benefit manager (PBM) reform stands out as a top bipartisan priority, with both House and Senate members eager to advance transparency and de-linking measures. Other lingering issues from the December 2024 healthcare package include Medicaid spread pricing prohibitions, streamlined enrollment for out-of-state providers, and targeted benefits for military service members. In Medicare, multi-cancer early detection screening and digital health policies may resurface, though larger reforms like Medicare physician fee schedule changes are likely to be deferred until later in 2026. 

Agency Developments: CMS Innovation and Regulatory Changes 

Beyond Congress, the Centers for Medicare & Medicaid Services (CMS) has been active, rolling out new models and rules that will shape the landscape in 2026 and beyond. Highlights include the 2027 Medicare Advantage Policy and Technical Changes Proposed Rule. Although it introduces no major policy shifts, the proposed rule addresses quality measurement, special needs plans, the Health Equity Index, and administrative burden reduction. It also codifies changes from the Inflation Reduction Act, such as cost-sharing and out-of-pocket limit reforms. The new ACCESS model (Advancing Chronic Care with Effective, Scalable Solutions) is intended to incentivize tech-enabled care for chronic conditions, with the model beginning July 2026. 

CMS also released updates to the outpatient, home health, and durable medical equipment rules, with a continued focus on site neutrality (aligning payments across settings) and removing barriers to beneficiary choice. The agency is placing ongoing emphasis on data collection, price transparency, and updated payment methodologies to reflect modern practice and technology. The GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model introduces most favored nation pricing for Medicaid, while additional mandatory Medicare drug pricing models are under review. Rural health transformation remains a CMS priority, with expectations for further announcements and awards before the end of the year. 

We expect 2026 to be another busy year for CMS with more new models being announced, continued policy refinements in the fee-for-service payment systems, and changes in Medicare Advantage based on feedback from the requests for information. 

Connect with HMA Policy Experts 

As the new year approaches, uncertainty remains the defining feature of federal health policy. The fate of ACA subsidies, the appropriations process, and a host of other reforms will hinge on negotiations in the coming weeks. For stakeholders navigating these complex dynamics, HMA’s team of policy experts stands ready to provide guidance, analysis, and support. 

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Preparing for Medicaid Community Engagement Requirements—Key Steps and Opportunities for States and Plans

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On December 8, 2025, the Centers for Medicare & Medicaid Services (CMS) issued anticipated guidance on Medicaid community engagement requirements, as established in the 2025 budget reconciliation legislation (P.L. 119-21, referred to as OBBBA). This guidance arrives at a pivotal moment, as states begin budget planning and legislative sessions. 

Health Management Associates (HMA) reviewed the guidance in the context of other policy and financing shifts that are affecting the Medicaid program. This article highlights key takeaways, addresses considerations for implementation, and issues for policymakers and healthcare organizations to track. 

Brief Background 

Generally speaking, Section 71119 of OBBBA requires states to implement community engagement requirements as a condition of Medicaid eligibility for individuals in the expansion population ages 19−64 who are neither pregnant nor enrolled in Medicare or any other mandatory Medicaid group. The guidance explains the statutory requirements related to how states verify community engagement, notify applicants and beneficiaries, ensure compliance with federal standards as the January 2027 deadline approaches, and other core components of the policy. 

Starting January 1, 2027, states must require certain Medicaid expansion applicants to demonstrate community engagement for at least one month and may require up to three consecutive months immediately prior to the month of application. If compliance or exemption status is unverifiable at the time of application, states must provide notice and an opportunity to respond. These enrollees will maintain coverage during the response period. States are also expected to establish clear documentation standards and proactive communication processes for applicants and enrollees. 

Three Key Takeaways from the Initial Guidance 

1. Organizations must understand the key dates leading up to January 1, 2027

Limited new funding and tight timelines make January 1, 2027, a critical deadline for implementation. Medicaid organizations need to consider, however, the full sequence of events leading up to that date, including providing required advance notification to individuals about the changes and their eligibility status. Documentation and progress tracking are essential, both for compliance and to demonstrate that CMS deadlines are being met. 

Although the guidance outlines notice and response requirements, it leaves open critical questions about how states will prevent procedural disenrollments, manage increased appeals volume, and mitigate due process legal risk if eligibility and verification systems fail at scale. 

2. Medicaid managed care organizations (MCOs) have a limited role in decision-making but are key to engagement

Medicaid managed care organizations are prohibited from making the determination that an individual has met the community engagement requirement; however, they have an opportunity to support individuals in a range of ways. Recent changes under OBBBA give plans clearer authority to conduct proactive outreach on eligibility and renewal requirements, which strengthens their ability to help members navigate deadlines, reporting expectations, and documentation needs. This capacity will be important because a lack of predictability in enrollment and churn can meaningfully affect the risk profile of plans and, as a result, increase volatility in provider negotiations. 

Plans, providers, community organizations, and state and local agencies can collaborate to develop effective engagement strategies, aligned messaging, and ongoing touch points. Helping members understand what is required—and when—and connecting them with resources to take action will be essential for successful implementation. 

3. States and partner organizations need a global view of IT changes and functionality

CMS emphasizes that the eligibility determinations for the community engagement requirements should function seamlessly with new and existing system functionality. Meeting this expectation requires states to have a deep understanding of whether and how policies can be operationalized in their systems without adding administrative burden for individuals and others that engage with the systems. 

Meeting federal expectations may be particularly challenging for states with county-based Medicaid systems, as implementing these requirements across multiple jurisdictions may necessitate a longer transition period. The OBBBA includes $200 million in total grant funding for implementation activities in 2026, and states can apply for enhanced federal IT funding at the 90/10 or 75/25 rates for certain costs and activities. Federal resources are otherwise limited, so it is critical that states and partner organizations establish a well-defined strategy to maximize available funding to support the system changes required to implement OBBBA eligibility requirements. 

What to Watch 

The guidance arrives as many governors begin releasing their budget proposals and planning for upcoming legislative sessions. Although the guidance provides clear information on the overarching parameters and a preliminary road map, certain critical details are forthcoming. State budgets should reflect the requirements and anticipate the need for rapid system and process development. 

CMS will issue an interim final rule by June 1, 2026, and states must implement the community engagement requirement no later than January 1, 2027. States must comply with these requirements and act quickly to develop, pay for, and implement new systems, policies, and processes—ideally before the latter half of 2026. 

CMS is developing additional guidance in several areas, including: 

  • Use of reliable data sources and how to satisfy the definition of engagement 
  • Implementation of the requirement to conduct renewals every six months for certain individuals 
  • Specific documentation requirements for community engagement 
  • Potential role that managed care plans can play unrelated to determining beneficiary compliance 

States and Medicaid organizations should closely monitor these developments and be prepared to adjust their strategies as new information becomes available. 

Connect with Us 

HMA’s experts are trusted problem solvers, partnering with states to navigate the complexities of community engagement planning, even as requirements and details continue to evolve. Drawing on deep state and federal experience, as well as lessons learned from previous large-scale eligibility reforms, our team helps Medicaid-focused organizations quickly design and implement practical, context-specific strategies that align with OBBBA requirements. Whether it’s strategy development, system design, or crafting effective messages, HMA brings a flexible, solutions-oriented approach to maximize continuity of coverage and meet each client’s unique needs. 

Contact our featured experts below to discuss how we can support your team in navigating these changes and building effective engagement strategies. 

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CMS Innovation Center’s ACCESS Model: What Medicare Organizations Need to Know

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On December 1, 2025, the Centers for Medicare & Medicaid Services (CMS) Innovation Center announced its latest model—ACCESS (Advancing Chronic Care with Effective, Scalable Solutions). A national, voluntary 10-year model designed to test outcomes-focused payment for technology-enabled care used in managing chronic conditions common among Original Medicare (fee-for-service) beneficiaries, ACCESS addresses the long-standing gap between Medicare’s payment system and technology’s capacity to improve healthcare delivery. 

The digital health technology and provider communities have expressed considerable interest in ACCESS. The US Department of Health and Human Services (HHS) and CMS highlighted the model at the December 4, 2025, Modernizing America’s Care for the Better event (recording here), noting over 250 organizations have already expressed interest in the model. Nonetheless, many details need clarification before the program launches.  

Health Management Associates (HMA) has reviewed the ACCESS model and is engaging with those agencies and organizations working on design and implementation. In this article, we share early insights and considerations for Medicare organizations and technology manufacturers interested in participating, as well as potential implications for the broader market. 

Model Overview 

ACCESS aligns with the administration’s strategic priorities for the Innovation Center, including: 

  • Incentivize greater use of technology in chronic disease prevention and management 
  • Increase access to tech-enabled care by overcoming payment barriers, while ensuring care is clinician-guided, coordinated, and accountable 
  • Expand clinicians’ ability to offer innovative care through a straightforward payment pathway 
  • Promote competition by publishing risk-adjusted performance results 
  • Reduce overall Medicare costs 

Core Requirements for ACCESS Participants 

Participants in the model (ACCESS care organizations) must be Medicare Part B participating providers or suppliers, exclusive of durable medical equipment, prosthetics, orthotics, and laboratory suppliers. Notably, these organizations must designate a Medicare-enrolled medical director to oversee care quality and compliance. These organizations will collaborate with primary care providers and other referring clinicians to offer tech-enabled services that complement traditional care, including: 

  • Telehealth software 
  • Wearable devices for continuous monitoring (e.g., sleep, heart rate, movement, glucose, etc.) 
  • Apps to track and coach lifestyle changes 

Care may be delivered in person, virtually, asynchronously, or through other clinically appropriate tech-enabled methods. 

While CMS has yet to release full details on covered digital health solutions, ACCESS care organizations are expected to offer integrated, technology-supported care, which may include: 

  • Clinician consultations 
  • Lifestyle and behavioral support (e.g., nutrition, exercise, smoking cessation) 
  • Therapy and counseling 
  • Patient education 
  • Care coordination 
  • Medication management 
  • Ordering and interpreting diagnostic tests and imaging 
  • Use or monitoring of Food and Drug Administration (FDA)-authorized devices 

ACCESS is intended to be a supplemental approach to traditional care. Primary care physicians and specialists will be able to refer patients to ACCESS organizations and will receive regular electronic updates on patient progress. 

New Options for Beneficiaries 

Unlike most other Innovation Center models, beneficiaries will be able to voluntarily sign up directly with an ACCESS organization or receive a referral from a physician. CMS will maintain a public directory of ACCESS participants, including the conditions they treat and their risk-adjusted outcomes, to help providers and beneficiaries make informed choices based on their needs. 

 Chronic Condition Focused Clinical Tracks 

ACCESS will launch with four clinical tracks, grouping related conditions with similar care approaches. Although CMS may add additional tracks and conditions in the future, the first four tracks address common chronic conditions among Medicare beneficiaries (affecting over two-thirds of Medicare beneficiaries). 

  1. Early Cardio-Kidney-Metabolic (eCKM): Hypertension, dyslipidemia, obesity, prediabetes
    Outcome measures: Control of or improvement in blood pressure (BP), lipids, weight, HbA1c 
  2. Cardio-Kidney-Metabolic (CKM): Diabetes, chronic kidney disease (CKD), atherosclerotic cardiovascular disease (ASCVD) 
  3. Outcome measures: Control or improvement in BP, lipids, weight, HbA1c; CKD/diabetes require eGFR (estimated glomerular filtration rate) and UACR (urine albumin-to-creatinine ratio) data submission 
  4. Musculoskeletal (MSK): Chronic pain
    Outcome measures: Improvement in pain intensity, interference, function (via validated patient-reported outcome measures [PROMs]) 
  5. Behavioral Health: Depression and/or anxiety
    Outcome measures: Improvement in symptoms (Patient Health Questionnaire-9 [PHQ-9], Generalized Anxiety Disorder-7 [GAD-7]); submission of World Health Organization Disability Assessment Schedule 2.0 (WHODAS 2.0) for overall function 

Participant organizations must manage all qualifying conditions within their chosen track. 

Payments 

CMS will release more details in the forthcoming request for applications (RFA). The model will use two payment approaches: 

  • Outcomes-Aligned Payments (OAPs): Paid to ACCESS organizations that achieve desired clinical outcomes, support technology-enabled interventions, and net savings for Medicare. OAPs are expected to be recurring (likely monthly) payments
  • Co-management Payments: Referring clinicians will receive approximately $30 per service, plus a one-time $10 bonus, for onboarding beneficiaries

To promote access in underserved areas, CMS will apply a fixed adjustment to OAPs for rural patients in qualifying tracks. 

FDA’s Complementary TEMPO Pilot 

The FDA’s Technology-Enabled Meaningful Patient Outcomes (TEMPO) pilot will work collaboratively with the ACCESS model. Manufacturers of digital health devices that have yet to receive FDA authorization can apply to TEMPO for enforcement discretion, allowing their devices to be used by ACCESS participants for covered care. The FDA is seeking statements of interest for participation in the TEMPO pilot beginning in January 2026. The agency plans to select up to 10 manufacturers in each of four specific clinical use areas to participate in the pilot. 

Next Steps 

Interested applicants should begin exploring participation as a Medicare Part B-enrolled provider if they have yet to enroll. Other key considerations for Medicare organizations include: 

  • Submit a nonbinding letter of interest to the Innovation Center 
  • Evaluate readiness to deliver technology-enabled, outcomes-focused care 
  • Assess capacity to manage qualifying conditions across clinical tracks 
  • Plan for data collection, reporting, and performance measurement 
  • Consider partnerships with technology vendors and referring clinicians 
  • Monitor regulatory developments and payment methodology updates 

How HMA Can Help 

HMA can help organizations navigate the application process, develop implementation strategies, and position your organization for success in the evolving Medicare landscape. If your organization is considering participation in ACCESS or wants to understand how this model could affect your market, contact our experts below.

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ACA Marketplaces at a Crossroads: New Analysis Compares Out-of-Pocket by Major Payers

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As we approach the end of 2025, the Affordable Care Act (ACA) Marketplaces face a pivotal moment. Enhanced Advance Premium Tax Credits (APTCs), introduced under the American Rescue Plan Act (ARPA) and extended through the Inflation Reduction Act (IRA), have driven enrollment to 24 million individuals now covered through the Marketplaces. Without congressional action, these subsidies expire on December 31, 2025.

HMA and Wakely, an HMA Company, have released updated analysis that compares enrollee out-of-pocket spending of ACA marketplace enrollees to other major payers using claims data.  The brief answers key questions about Marketplace enrollees and whether they spend more or less out-of-pocket relative to Medicare, ESI and Medicaid enrollees.

Click here to view the white paper.

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CMS’s 2027 Medicare Advantage Proposed Rule Focuses on Outcomes and Competition

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On November 28, 2025, the Centers for Medicare & Medicaid Services (CMS) released the Contract Year 2027 Policy and Technical Changes to the Medicare Advantage Program and Medicare Prescription Drug Benefit Program. Each annual rulemaking cycle offers CMS an opportunity to recalibrate program priorities.  

This proposed rule offers a road map for CMS’s vision for Medicare Advantage (MA) and Part D. Signaling how CMS leadership intends to shape the MA and Part D programs beyond 2027—prioritizing outcomes, streamlining operations, and inviting dialogue on modernization—the proposed rule reflects a strategic imprint on the program’s trajectory. The deadline to submit comments is January 26, 2026. 

Given CMS’s goal of modernizing MA and Part D, plans, providers, and advocates should engage early to inform final policies. Health Management Associates (HMA) policy and actuarial experts, including Wakely and Leavitt Partners (both HMA companies), are analyzing and modeling the effect of the proposed changes. This article highlights some of the major policy updates that require near-term planning by states, Medicare Advantage plans, providers who serve MA beneficiaries, and their partners. 

Key Themes in the Proposed Rule 

Requests for Information 

CMS includes three significant requests for information (RFIs) and highlights additional opportunities to provide input on approaches to reduce administrative burden throughout the program. CMS’s modernization RFI focuses on financing and other strategies to support beneficiaries with plan selection. In addition, CMS seeks input on emerging trends in MA special needs plans (SNPs), citing concerns about rapid growth and potential program integrity issues. Consistent with the departmentwide priorities, the RFI also delves into potential strategies for plans to address nutrition and wellness benefits for MA enrollees. 

Figure 1. RFIs Signaling New Policy Directions 

Star Ratings Overhaul: Refocusing on Outcomes and Experience

CMS proposes significant changes to the Star Ratings system, which influences plan bonuses and consumer choice. The changes increase the focus on clinical care, outcomes, and patient experience of care measures where performance is not topped out and align with universal foundation of measures. 

  • Health Equity Index Rollback: Rather than implement the previously planned Excellent Health Outcomes for All reward (formerly Health Equity Index) for 2027, the agency will continue using the historical reward factor that incentivizes consistently high performance across all measures. 
  • Measure Streamlining: Twelve process-heavy or administrative measures will be removed. 
  • Behavioral Health: A new measure for depression screening and follow-up will be introduced for the 2027 measurement year, with integration into Star Ratings by 2029.  

Why It Matters: Removing these measures continues the shift away from administrative compliance, easing burden while strengthening quality incentives. 

Medicare and Medicaid Dual Eligible SNPs and Integration 

CMS is proposing several changes to improve how Medicare Advantage plans serve people who qualify for both Medicare and Medicaid (dual-eligible beneficiaries): 

  • Starting in calendar year (CY) 2027, CMS proposes to allow D-SNPs and I-SNPs two opportunities to change to their model of care (MOC)—the framework for how they coordinate care. These windows would be January 1 through March 31 and October 1 through December 31. 
  • When beneficiaries are automatically moved (i.e., passively enrolled) from one integrated D-SNP to another, CMS will no longer require the new plan’s provider network to closely match the old plan’s network. Instead, the new plan must ensure that all incoming members receive uninterrupted care for at least 120 days (up from 90 days), helping prevent gaps in treatment. 
  • In states where dually eligible individuals are explicitly carved out from or not required to enroll in Medicaid managed care, CMS proposes to let highly integrated dual eligible special needs plan (HIDE SNP) continue to enroll full-benefit, dual-eligible (FBDE) individuals in the same service area, even if those individuals are in Medicaid fee-for-service. This change is intended to maintain coverage and simplify enrollment for these beneficiaries. 

Why It Matters: While the proposed changes revise broader policies, the updates could have significant effects on D-SNP and MA integration. These changes also could shape states’ decisions regarding their integration policies. Plans should continue to monitor these developments. 

Other Notable Changes  

CMS proposes a new special enrollment period (SEP) for beneficiaries when their providers leave a plan’s network, eliminating the requirement that CMS deem the change “significant.” The intent of this change is to preserve continuity of care and ease the burden of beneficiaries switching plans. In addition, CMS plans to codify SEP policies for greater consistency. 

The proposed rule also calls for the following: 

  • Codifying multiyear changes stemming from the Inflation Reduction Act, including elimination of the coverage gap phase 
  • Lowering annual out-of-pocket thresholds and removal of cost sharing in catastrophic coverage 
  • Transitioning to the Manufacturer Discount Program and updating true out-of-pocket (TrOOP) calculations 
  • Clarifying specialty-tier drugs and subsidy structures 

As a result, plans will have updated financial responsibilities. 

Connect With Us 

As CMS sets a new course for Medicare Advantage and Part D, organizations face both opportunities and challenges in adapting to these changes. HMA brings deep expertise in Medicare policy, actuarial modeling, and operational strategy. Our team—including experts from Wakely and Leavitt Partners—can help plans, providers, and stakeholders interpret the proposed rule, assess its impact, and develop actionable strategies for compliance and competitive positioning. 

Whether you need data-driven analysis, scenario modeling, or hands-on support preparing for implementation, HMA is ready to partner with you to navigate the evolving Medicare landscape and achieve your goals. Contact our experts below to discuss your questions and how HMA can help.

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Five Key Takeaways from the 2025 National Association of Medicaid Directors (NAMD) Conference

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At the National Association of Medicaid Directors (NAMD) 2025 Fall Conference, planned federal health policy changes dominated conversations among attendees, including state Medicaid directors, health plans, and providers. With major changes on the horizon for Medicaid and Affordable Care Act (ACA) Marketplace programs, stakeholders are preparing for transition and transformation in 2026. 

A team from Health Management Associates (HMA) attended the conference and returned with valuable insights on the emerging opportunities, state-specific priorities for 2026 and beyond, and early strategies to address and mitigate the challenges ahead. Among the topics discussed were the Rural Health Transformation Program (RHTP), Medicaid eligibility and community engagement policy changes, drug costs and financing, upstream drivers of health, and data infrastructure. 

Five major takeaways about the work state Medicaid agencies, health plans, providers, and industry partners will focus on in the year ahead were as follows. 

1. Medicaid leaders are preparing for new eligibility and community engagement policies under tight timelines. 

The 2025 budget reconciliation act (P.L. 119-21, OBBBA) requires certain adults ages 19–64 enrolled in Medicaid to complete at least 80 hours per month of community engagement (CE) to maintain coverage. Exemptions to the CE requirement apply to people with disabilities, pregnant individuals, and caregivers. States must now develop processes and information systems that track and verify compliance with CE requirements, manage exemptions, and support members through this policy change. 

Medicaid CE and other new eligibility requirements, including more frequent eligibility checks, were a frequent topic of discussion throughout the event. Implementation of these requirements is a major operational lift with significant program integrity implications. State leaders discussed the tight timelines, resource constraints, and the need to coordinate across agencies, health plans, and providers. They are already planning to mitigate the risk of coverage losses for at-risk populations and to minimize administrative burden for all stakeholders. The urgency and complexity of these changes underscore the need for strategic planning and cross-sector collaboration. 

2. Coordinated communication and stakeholder engagement remain critical. 

States are increasingly relying on multiple forms of communication and feedback channels to engage stakeholders, including Medicaid members. Clear, timely communication is essential to ensure people understand their options and know what they need to do and when to do it. Medicaid leaders described the value of embedding vital eligibility information into workflows at all levels and applying lessons from the COVID-19 public health emergency unwind to new outreach and education initiatives. 

Several states emphasized the effectiveness of convening all stakeholders to ensure unified messaging. Other common themes included the importance of plain-language materials, hands-on support through case managers and navigators, and engaging providers to integrate new eligibility and work-related requirements into their workflows, as policies evolve. 

3. States are eager to begin implementing initiatives in their rural health transformation plans. 

Medicaid leaders are actively discussing their RHTP applications with CMS, preparing to move quickly once awards are announced. Many states are focused on enhancing existing efforts, while others are preparing to invest in systems, technology, and organizations that will better integrate rural providers into the broader healthcare system, including Medicaid. 

Federal and state leaders and their partners discussed the opportunity for RHTP funding to strengthen rural health infrastructure, workforce development, education, and outreach—especially in underserved areas. States are positioning themselves to leverage these funds to address persistent disparities and improve access to care for rural populations. 

4. States are seeking to balance cost and access to GLP-1s and other prescription drugs. 

Federal and state leaders extolled the benefits of new and innovative prescription drug products and therapies, including GLP-1s. Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz highlighted the administration’s announcements about drug pricing, including the new GENEROUS (GENErating cost Reductions fOr US Medicaid) model, which is focused on drug costs in the Medicaid program. These discussions reinforced CMS’s focus on new drug pricing models and the importance of involving Medicaid experts in these nuanced development and implementation conversations. 

Attendees gained a deeper appreciation for the administration’s intent to have GLP-1s and other therapies play a significant role in addressing chronic disease, including obesity. State Medicaid agencies—and their Medicaid managed care plans and partners—should plan to inform discussions about coverage and financing of these novel products as well as for cell and gene therapies. The intersection of innovation, affordability, and access will remain a central challenge. 

5. Medicaid agencies are working on multiple technology interoperability and quality initiatives.  

Although Medicaid eligibility policy changes and CE requirements drew significant attention, many discussions also focused on other upcoming deadlines, including: 

  • New federal interoperability and prior authorization rules that go into effect in 2027 
  • State implementation of Medicaid and CHIP Quality Rating System requirements before the end of 2028 
  • The transition to digital quality measurement (dQM) by 2030 

Medicaid agencies are collaborating with managed care and provider organizations to understand the operational, clinical, and technical dimensions of these initiatives. 

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HMA’s expert consultants provide advanced policy, technical, and operational support, and can help your organization navigate and succeed in the evolving regulatory landscape. Our team brings deep experience and practical solutions to help clients anticipate challenges, leverage opportunities, and achieve their program goals. For more information or technical assistance on these and other emerging Medicaid priorities, contact the HMA’s featured experts below.

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