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Medicaid Managed Care Enrollment Declines in Q1 2026: 黑料不打烊 Analysis of State Trends and Market Share

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黑料不打烊 (黑料不打烊) analyzed monthly Medicaid managed care enrollment data from 34 states to assess enrollment trends as of March 2026. The findings show that Medicaid managed care enrollment continued to decline as states navigate new eligibility policies and preparations for new Medicaid community engagement requirements under the 2025 budget reconciliation act, P.L. 119-21, now known as the Working Families Tax Cut (WFTC) Act. These trends serve as an early indicator of how policy and programmatic changes may affect Medicaid enrollment levels in the years ahead.

Drawing on monthly enrollment data from the 34 states, 黑料不打烊 found that Medicaid managed care enrollment fell to 60.4 million members in March 2026鈥攁 decline of 3.1 million members from March 2025, or 4.8 percent year over year. As states prepare to address this issue, this enrollment snapshot provides important insights into how administrative and policy changes may shape Medicaid participation in the years ahead.

Medicaid Managed Care Enrollment Trends in Q1 2026

黑料不打烊 Information Services (黑料不打烊IS) maintains a database of monthly Medicaid enrollment from all 50 states and Puerto Rico. The most recent 黑料不打烊 analysis showed that enrollment declines were widespread across the 34 states studied (Figure 1). Key findings include:

  • Enrollment changes varied considerably across states, reflecting a combination of state-specific demographic, administrative, operational, and policy factors.
  • Of the 34 states,听only four鈥擟olorado, Mississippi, Nevada, and South Carolina鈥攕howed modest gains in Medicaid managed care enrollment from March 2025.
  • Several states experienced particularly significant declines. Arizona, Indiana, Kansas, and Louisiana听each reported data reflecting , ranging from
  • Among the听expansion states in the analysis,听enrollment听declined听by听2.5听million (5 percent) to听48.4听million.听The听eight non-expansion states听included in this analysis experienced听a听decline of 547,000 (4.4 percent),听bringing听enrollment to听12听million enrollees.

Figure 1. 黑料不打烊 Analysis of Medicaid Managed Care Enrollment in 34 States, March 2026

Note: States colored as blue shown on the map above are included in the 黑料不打烊 Enrollment Analysis.

National Medicaid Managed Care Market Share

黑料不打烊IS鈥檚 resource contains information on approximately 300 Medicaid managed care plans across 41 states and tracks corporate ownership, program participation, and tax status among participating plans.

As of March 2026, Centene held the largest share of the national Medicaid managed care market at 17.9 percent. Elevance followed with 10.6 percent, while United and Molina accounted for 8.4 percent and 6.0 percent, respectively (see Figure 2). These four organizations represented 42.9 percent of enrollment among the plans analyzed, underscoring continued concentration among large, national Medicaid managed care organizations, even as overall enrollment declines.

Figure 2. National Medicaid Managed Care Enrollment Share by Parent Organization, March 2026

How Medicaid Work Requirements and Eligibility Policies Could Affect Enrollment in 2027

The enrollment trends observed at the end of the first quarter (Q1) of 2026 come on the cusp of significant policy change. On June 1, 2026, the Centers for Medicare & Medicaid Services (CMS) released an interim final rule establishing a national framework for implementing Medicaid community engagement requirements under P.L. 119-21. The rule outlines federal parameters for eligibility exemptions and state implementation responsibilities.

States must now translate these federal requirements into operational eligibility policies, technology systems, administrative procedures, and beneficiary communications. As implementation moves forward, enrollment trends will provide important insights into how policy changes and state implementation affect enrollment levels and continuity of coverage across Medicaid programs.

Several states are advancing implementation of the new eligibility policies. Nebraska launched Medicaid work/community engagement requirements on May 1, 2026. Montana plans to begin implementation on July 1, 2026, while Arkansas intends to begin a soft launch of the new requirements in July 2026 before enforcement begins in January 2027.

Declines in enrollment are often an early indicator of broader impacts across the healthcare system, including uncompensated care levels, shifts in payer mix, and increased financial pressure on safety鈥憂et systems. For managed care organizations, even modest enrollment changes can mask shifts in risk profiles, geographic concentration, or service needs.

Data Considerations.The data in this analysis have some important limitations. States report enrollment figures at different points throughout the month, with some data reflecting beginning of the month totals and others capturing end of month enrollment. In addition, some state datasets encompass all Medicaid programs offering managed care plans, whereas others reflect only a subset of the managed Medicaid population. As a result, the findings should be viewed as indicative of broader trends rather than a comprehensive state-by-state comparison.

The 黑料不打烊IS enrollment reports and analyses, available through subscription, use data from nearly 300 health plans in 41 states.鈥疶he report provides by-plan enrollment plus corporate ownership, program inclusion, and for-profit versus not-for-profit status, with breakout tabs for publicly traded plans. 黑料不打烊IS鈥檚 Medicaid enrollment data, financials, procurement tracking, and a robust library of public documents鈥痚quips stakeholders with timely, actionable intelligence. Subscribe here.

Connect with Us鈥�

黑料不打烊 knows the Medicaid managed care landscape and how it is evolving. Medicaid changes under the WFTCA are affecting eligibility, financing, waivers, managed care oversight, provider reimbursement, and program integrity. 黑料不打烊 helps organizations assess impact, plan next steps, and move from policy analysis to implementation with confidence. Contact us to prepare your organization.

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Clover Health Star Ratings Decision Signals Need for MA Plans to Engage in Scenario Planning

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On May 27, 2026, a federal court ruled that the Centers for Medicare & Medicaid Services (CMS) unlawfully included certain quality measures in Clover Health鈥檚 2026 Medicare Advantage (MA) Star Ratings, raising important questions for MA issuers.

In an exclusive webinar for clients, Wakely, an 黑料不打烊 Company, addressed the , its implications, and the resulting policy and financial issues, some of which remain unanswered.

Clover Decision Requires Careful Interpretation

The US District Court for the Southern District of Georgia ruled that CMS acted unlawfully when it incorporated certain quality measures into Clover鈥檚 Star Ratings. According to the decision, CMS relied on data sources beyond those permitted and did not follow required procedural steps, including notice and comment rulemaking. As a result of the decision, CMS was required to recalculate Clover鈥檚 2026 Star Ratings, removing the disputed measures from the rating process.

Although the judgment applies specifically to Clover, the underlying legal reasoning raises broader questions that could affect how the Star Ratings program is administered for MA plans going forward.

Clover Decision Raises Strategy Questions for Other Plans

Wakely Consulting modeled the revenue impact of the 20 Stars measures specific to the Clover case as well as three scenarios based on the court鈥檚 ruling:

Key takeaways for MA plans include:

  1. The Clover decision creates a meaningful degree of uncertainty for the Star Ratings program and its future design. Carriers need to have nimble approaches and resources that respond to the evolving legal and policy landscape.
  2. The ruling is limited to the 20 measures Clover disputed in its lawsuit; however, the legal reasoning in the case and the US District Court ruling could apply to other measurements.
  3. Although the judgment only directly affects Clover, other MA plans have already cited the decision in separate, ongoing litigation, which increases the possibility that similar arguments could be applied more broadly. Organizations participating in the MA market should closely monitor these developments.
  4. CMS鈥檚 near-term steps will be critical for the market and current strategy. It is still unknown whether CMS will appeal the decision. MA organizations should be watching for further legal filings as well as additional guidance from the agency. Potential future guidance could address whether rebids will be permitted and, if so, the scope and timing of that process.
  5. MA organizations also need to keep an eye on the federal policies that will inform future federal policy decisions related to the design and implementation of the Star Ratings program. The Clover decision and related litigation may determine policy proposals advanced by Congress, CMS, or both.

Decision Creates Urgency for Modeling and Scenario Planning

The range of possible outcomes requires carriers to undertake robust scenario planning to ensure they are prepared to act on the options available to them and the multiple pathways that are likely to emerge.

Wakely鈥檚 actuarial and policy team will continue to monitor guidance from CMS as well as the ongoing legal process. To discuss specific scenarios and implications for your organization specifically and the market generally, contact our actuarial team.

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Outlook 2026: New Guidance Raises the Bar for Medicaid 1115 Demonstration

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As part of its ongoing effort to reshape Medicaid policy and oversight, the Centers for Medicare & Medicaid Services (CMS) over the past few months has released a series of guidance documents in 2026 that collectively signal a more structured, fiscally rigorous approach to federal Medicaid funding. These changes will have a considerable impact on state innovation within the program.

In the most recent of these consequential directives, CMS outlines its plan to implement updated budget neutrality requirements for Medicaid Section 1115 demonstrations beginning in 2027.

To understand what this guidance means for states, health plans, and providers, 黑料不打烊 (黑料不打烊) senior principal Andrea Maresca caught up with Sara Singleton, Principal at Leavitt Partners, an 黑料不打烊 Company, and Rob Buchanan, Senior Principal at 黑料不打烊. Of particular interest was the need for significantly more robust modeling and financing strategies to provide the new prospective actuarial analyses required for approval.

A Shift in Federal Policy Direction

Q: CMS has issued several guidance documents this year, but why and how does the one on Section 1115 budget neutrality stand out?

Sara Singleton: This guidance reflects a broader shift toward increased federal oversight and a more standardized interpretation of budget neutrality. While Section 1115 demonstrations have always been required to be budget neutral in concept, CMS and states have historically relied on methodologies that allowed for flexibility and, in some cases, greater federal spending over time.

What鈥檚 different now is that Congress recently added a requirement that the CMS Chief Actuary certify that demonstrations will not increase federal expenditures relative to what Medicaid would otherwise spend. That requirement, combined with CMS鈥檚 implementing guidance, is driving a more prospective, and in theory, data-driven approach to evaluating demonstrations.

Q: How is the change from reviewing retrospective to prospective spending expected to affect Medicaid programs?

Sara Singleton: Historically, CMS often reviewed budget neutrality retrospectively against what鈥檚 called 鈥渨ithout waiver鈥� spending limits, which means the agency reviewed what spending would have been in the absence of the waiver program. Going forward, CMS is emphasizing prospective certification and signals an expectation that states will provide more rigorous actuarial analysis and activity-level financial modeling.

The implication is that states will need to demonstrate upfront and in much greater detail how each component of their demonstrations affect federal spending. This is a substantive change in expectations for documentation, analytics, and accountability.

Implications for Innovation, Including HRSN Initiatives

Q: Sara, you鈥檝e written previously about the opportunities to address health-related social needs (HRSN) through Medicaid. How does this new guidance intersect with those efforts?

Sara Singleton: The timing is important. Over the past several years, the number of states utilizing 1115 waivers to address HRSNs, such as housing instability, nutrition, and transportation, has significantly increased. Many of these waivers and additional research have proven what we have long known to be true鈥攖hat addressing HRSNs has a clear impact on health outcomes and costs.

The new budget neutrality framework raises the bar for states to demonstrate that new innovations in an 1115 waiver will reduce costs before the waiver can be approved. States will need to show not just that these services are beneficial, but that they also are financially sustainable within the federal budget neutrality test. That鈥檚 a higher evidentiary standard, particularly for newer or more complex interventions.

Q: Does that mean HRSN initiatives are at risk?

Sara Singleton: Not necessarily; however, it does mean states may need to rethink how they structure and justify them.

One key element in the guidance is the distinction between services that are already Medicaid-authorizable and those that are unique to Section 1115 demonstrations. CMS is signaling a preference for using existing authorities where possible. CMS鈥檚 preference and negotiations with states could lead states to shift some HRSN activities into managed care programs, including using in lieu of services, or state plan options.

For services that remain in 1115 demonstrations, the burden will be on states to build a more robust financial and policy case. That expectation could shape which interventions move forward.

Q: Rob, what are you hearing from states as they process this guidance?

Rob Buchanan: States recognize that Section 1115 demonstrations are critical tools鈥攖hey allow flexibility to test new delivery models and address complex population needs. In fact, every state has an 1115 demonstration, each with tailored initiatives that span coverage, benefits and services, workforce investments, and other programs. The pathway to approval and iteration of these programs is becoming more complex.

From a planning perspective, states will need to rethink how they approach the entire life cycle of a demonstration鈥攆rom concept development to modeling, implementation, and evaluation.

Q: Where are the biggest pressure points?

Rob Buchanan: 黑料不打烊 consultants have identified three key areas.

First is analytics and actuarial capacity. The guidance calls for more rigorous financial projections and certification prior to approval, which means states need stronger data infrastructure and modeling capabilities earlier in the process.

Second is program design and prioritization. Because demonstrations that increase federal spending will not be approved, states may need to narrow their focus, phase in initiatives, or identify offsetting savings within the demonstration.

Third is timing and alignment. CMS has indicated it will begin applying this framework in 2027, even as rulemaking continues. States with renewals or amendments coming up in that window will need to move quickly to align with the new expectations.

Q: How should states begin adapting their strategies?

Rob Buchanan: We鈥檙e advising states to start with a few practical steps.

One is to reassess their current demonstration portfolios. Which components are most essential? Which are most likely to meet the new budget neutrality standard? That prioritization will be critical.

Another is to integrate policy, finance, and operations early. Under this framework, you can鈥檛 develop policy concepts in isolation. You need to understand the financial implications from the outset.

Finally, states should think about implementation pathways. For example, if certain services can be authorized through managed care or state plan options, that may provide more flexibility than relying solely on Section 1115 authority.

Q: Does this change how states should think about partnerships?

Rob Buchanan: Yes, the level of coordination required across Medicaid agencies, actuaries, managed care plans, providers, and community organizations is increasing.

States will need strong partnerships to both design workable demonstrations and execute them effectively. That includes building connections with community-based organizations, particularly for initiatives that address HRSNs, where implementation relies heavily on local networks.

Q: As we look toward 2027 implementation, what should states and other Medicaid-focused organizations be focused on now?

Rob Buchanan: The most important thing is to recognize that this is not a distant policy change. It鈥檚 an immediate planning issue and states should already be assessing how the new framework applies to their program.

Compliance with this guidance requires state Medicaid programs to have detailed data  鈥� specifically actuarial analyses that have a clear methodology and assumptions and documentation demonstrating the federal fiscal impact of each demonstration component. States must provide sufficient information for CMS鈥檚 Chief Actuary to evaluate and certify budget neutrality. Plans and providers should also be engaged because these changes will influence program design, reimbursement approaches, and operational expectations.

Sara Singleton: At a broader level, stakeholders should expect additional guidance from CMS. This is one piece of a larger policy agenda, and CMS plans to provide additional clarification through the federal rulemaking process as well as technical assistance to states.

黑料不打烊, including 黑料不打烊 companies Wakely and Leavitt Partners,听is actively helping states, health plans, providers, and other stakeholders assess the implications of CMS’s proposed budget neutrality framework and prepare for upcoming section 1115 renewals and amendments, as well as other changes due to recent guidance on community engagement requirements, state directed payments, and program integrity. 黑料不打烊 can support strategic assessments, renewal planning, demonstration redesign, financial modeling, actuarial coordination, federal negotiations, and implementation planning. Connect with 黑料不打烊 to learn how we can support your organization in navigating the next phase of Medicaid Section 1115 demonstration and policy.

You can find more insights on the impact of federal Medicaid policy changes in, CMS Proposes New Budget Neutrality Framework for Medicaid Section 1115 Demonstrations and register for the next edition of 黑料不打烊鈥檚 Summer Webinar Series: Understanding Work and Community Engagement Requirements and New Section 1115 Guidance

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CMS听Proposes New Budget Neutrality Framework for Medicaid Section 1115 Demonstrations听

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New guidance outlines how CMS intends to implement Chief Actuary certification and a fundamentally different approach to budget neutrality beginning January 1, 2027.

[黑料不打烊鈥檚 analysis on this and related Medicaid changes is ongoing; this blog reflects an initial understanding of the 6/11 SMDL; additional analysis is forthcoming.]

On June 11, 2026, the Centers for Medicare & Medicaid Services (CMS) released State Medicaid Director Letter (SMDL) #26-003, which provides long-anticipated guidance on how the agency intends to implement new statutory budget neutrality requirements for Medicaid section 1115 demonstrations beginning January 1, 2027.

The SMDL provides guidance on CMS’s implementation of provisions enacted in Public Law 119-21 (the One Big Beautiful Bill Act, or OBBBA), which CMS now refers to as the Working Families Tax Cut (WFTC) Act. The law requires the CMS Chief Actuary to certify that Medicaid section 1115 demonstrations will not increase federal Medicaid expenditures before CMS may approve new demonstrations, amendments, or renewals.

While the SMDL includes discussion of CMS’s preference that states rely on Medicaid state plan and other Title XIX authorities when available, the guidance primarily focuses on implementing the new budget neutrality requirements under section 1115(g).

The result is a proposed framework that could fundamentally change how states design, finance, evaluate, and renew section 1115 demonstrations.

Key Takeaway #1: Budget Neutrality framework is changing to become more accurate, detailed, and subject to enhanced review.

For decades, Medicaid Demonstrations under Section 1115 required budget neutrality calculations that relied on comparisons of projected with and without waiver expenditure. Retrospective assessments against established 鈥渨ithout waiver鈥� budget neutrality limits then occurred.

CMS now proposes a different model that includes enhancements to how the budget neutrality calculations are developed and reviewed. This will include an actuarial certification requirement that shows how the budget neutrality meets actuarially sound principles.

Beginning with applications, renewals, or amendments submitted after January 1, 2027, the following must occur:

  • CMS鈥� Chief Actuary must certify that there will be no increase in federal expenditures compared to the expenditures projected in the absence of the Demonstration.
  • A rigorous actuarial analysis of the projected financial impacts of individual demonstration activities must be performed. The budget neutrality analysis is certified by CMS鈥� Chief Actuary prior to Demonstration approval. This is a change from the historical 鈥渨ithout waiver鈥� expenditure cap calculation.
  • With the review above, there is now no expenditure limit or budget neutrality cap. Instead, the budget neutrality is not approved if there is a projected increase in Federal Medicaid expenditures. (Note, approval of historical Demonstration applications and budget neutrality required a projection of reduced overall expenditures.)
  • Monitoring budget neutrality in the Demonstration time period will utilize new special terms and conditions (STCs). There will be corrective actions implemented if expenditure substantially deviates from the State projections. Historically, quarterly and annual reporting was required, and States were subject to return to CMS any excess federal funds. The new guidance appears similar in that ongoing monitor will occur and action will be needed to the extent expenditures are not at or below projections.

For states to be compliant with this guidance, detailed actuarial analyses, methodology, assumptions, data, and documentation demonstrating the federal fiscal impact of each demonstration component will be necessary. States must provide sufficient information for CMS鈥檚 Chief Actuary to evaluate and certify budget neutrality, including the populations affected, covered services, payment methodologies, payment rates, administrative costs, and estimated federal expenditures associated with demonstration authorities.

Key Takeaway #2: Beginning January 1, 2027, certain benefits and services may be treated differently under Medicaid section 1115 demonstrations.

A central feature of the new framework is CMS’s proposed classification of demonstration activities into two categories.

The first category is Medicaid Authorizable Populations and Services (MAPS). These are populations and services that could otherwise be covered through the Medicaid state plan or another Title XIX authority. For budget neutrality purposes, CMS proposes treating MAPS expenditures as having a zero net financial impact because they represent expenditures that could have occurred absent the demonstration. This is similar to how current hypothetical expenditures are treated.

The second category consists of section 1115-only activities; that is, activities that could not otherwise be authorized through existing Medicaid authorities. These activities would become the primary focus of budget neutrality review.

States would be required to identify, measure, and document both the costs and savings associated with each section 1115-only activity, including administrative costs. CMS would then evaluate the aggregate financial impact of those activities when determining whether a demonstration qualifies for certification.

Key Takeaway #3: Medicaid 1115 demonstration savings will become more difficult to accumulate and carry forward.

CMS also proposes significant changes to the treatment of demonstration savings.

Historically, states have been able to accumulate budget neutrality savings and, under certain circumstances, carry those savings into future renewal periods. Many demonstrations have relied on these accumulated savings to support cost-not-otherwise-matchable expenditures and other demonstration initiatives.

Under the new approach, savings generally would be limited to those generated during the current demonstration period and could only be applied to the next immediate renewal period. CMS also proposes limiting rollover calculations to the most recent five years of demonstration experience and eliminating the longstanding ability to carry forward legacy savings across multiple renewal cycles.

CMS would provide a transition period for the first renewal after January 1, 2027, allowing states to use savings calculated under the current methodology. Over time, however, the proposed framework is expected to reduce the amount of demonstration savings available to states.

For states that have historically relied on demonstration savings as a key financing mechanism, these changes could require significant strategic and financial planning.

Key Takeaway #4: States and Medicaid-focused organizations should begin to identify alternative approaches, authorities, and partnerships to continue to advance the goals of certain 1115 demonstration initiatives.

One of the more closely watched aspects of the guidance involves CMS’s discussion of the relationship between section 1115 authority and other Medicaid authorities.

The final guidance stops short of directing states to systematically move authorities out of section 1115 demonstrations. Instead, CMS encourages states to reduce reliance on section 1115 authority when alternative Medicaid authorities are available, noting that doing so would strengthen oversight while reserving section 1115 authority for innovation and demonstration purposes. The agency specifically references Medicaid state plan authorities and other Title XIX authorities as potential alternatives where appropriate.

At the same time, CMS recognizes that, in certain circumstances, states may require concurrent section 1115 authority layered over other Medicaid authorities to achieve program goals and has indicated that it will provide technical assistance in those situations.

The interaction between this policy and the new MAPS framework may be particularly important. CMS provides examples showing that many authorities currently treated as hypothetical expenditures鈥攊ncluding certain home- and community-based services (HCBS), managed care-related authorities, and other services that could be authorized elsewhere under Medicaid鈥攚ould now be treated as MAPS activities for budget neutrality purposes.

For states, the immediate significance may be less about whether authorities remain within a section 1115 demonstration and more about how those authorities are treated under the new budget neutrality framework. As states assess the implications of the guidance, they may want to consider how various authorities are structured across section 1115 demonstrations, state plan authorities, and other Title XIX pathways. CMS’s discussion suggests that these decisions may increasingly be informed by both programmatic objectives and budget neutrality considerations.

Key Takeaway #5: States and Medicaid organizations can begin scenario planning and assessments now and monitor additional guidance and clarifications critical to operational issues.

Although CMS provides substantial detail regarding its intended direction, several important implementation questions remain unanswered. Among the issues states are likely to focus on over the coming months:

  • How will CMS apply the new requirements to renewals that are already under review鈥攐r that are submitted before January 1, 2027鈥攂ut remain pending after that date?
  • How long will CMS鈥檚 Chief Actuary review take, and how should states adjust renewal and amendment timelines to account for the new certification process?
  • How aggressively will CMS apply its stated preference for using state plan and other Title XIX authorities when alternative pathways exist?
  • What level of documentation, modeling, and actuarial support will CMS ultimately require to support certification?
  • How will CMS define acceptable methodologies and assumptions in the forthcoming rulemaking process?

CMS repeatedly notes that additional technical guidance, technical assistance, and formal rulemaking are forthcoming, suggesting that many operational details remain under development.

Key Takeaway #6: States should build additional time into future section 1115 renewal and amendment planning

Although significant details remain unresolved, the overall direction of federal policy is becoming clearer.

States with upcoming section 1115 renewals, amendments, or major demonstration redesign efforts should begin assessing which components of their demonstrations are likely to be classified as MAPS activities versus section 1115-only activities. They should also evaluate the extent to which future financing strategies depend on rollover savings or other elements of the current framework that may no longer be available after January 1, 2027.

In addition, states may want to assess whether certain demonstration authorities could be more appropriately administered through state plan, managed care, HCBS, or other Medicaid authorities, particularly given CMS’s stated preference for relying on alternative Title XIX pathways when available.

Most importantly, states should prepare for a future in which section 1115 approval decisions are increasingly driven by prospective actuarial analyses of the financial impact of individual demonstration activities that include detailed supporting documentation for CMS鈥檚 Chief Actuary to utilize for approval.

The forthcoming proposed rule will provide critical details; however, this guidance makes clear that CMS intends to reshape how section 1115 demonstrations are financed, evaluated, and renewed in the years ahead.

How 黑料不打烊 Can Help

黑料不打烊 is actively helping states, health plans, providers, and other stakeholders assess the implications of CMS’s proposed budget neutrality framework and prepare for upcoming section 1115 renewals and amendments, as well as other changes due to recent guidance on community engagement requirements, state directed payments, and program integrity. Our experts bring deep experience in section 1115 demonstrations, Medicaid financing, budget neutrality modeling, actuarial analysis, managed care authorities, HCBS programs, waiver strategy, and federal negotiations.

As states evaluate the operational, financial, and policy implications of the new requirements, 黑料不打烊 can support strategic assessments, renewal planning, demonstration redesign, financial modeling, actuarial coordination, federal negotiations, and implementation planning. We are also tracking forthcoming rulemaking and additional CMS guidance that will further shape how section 1115(g) is implemented.

Be sure to register for our upcoming webinar, Understanding Work and Community Engagement Requirements and New Section 1115 Guidance, on July 15.

CMS Proposes New Budget Neutrality Framework infographic
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Act Now to Implement Community Engagement Requirements

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On June 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the highly anticipated Interim Final Rule (IFR) on implementing the Medicaid work and community engagement requirements set forth in the 2025 budget reconciliation act, P.L. 119-21. States are expected to implement the requirements by January 1, 2027, leaving Medicaid authorities, health plans, providers, and community-based partners with a compressed timeline to design, test, and deploy new workflows that will fundamentally change how eligibility and compliance are administered.

This article builds on 黑料不打烊 (黑料不打烊) colleagues鈥� ongoing analysis of federal Medicaid policy changes stemming from the Working Families Tax Cut Act and evolving federal priorities (see Connecting the Dots here and here) and explores the implications for enrollees, state agencies, health plans, and providers. 

Community engagement requirements create risk and exposure for all of these interest-holders, opening them to the possibility of increased enrollment churn, particularly during the early stages of implementation as enrollees and administrators adapt to new processes. Even Medicaid enrollees who meet compliance requirements or qualify for exemptions could experience temporary coverage losses or disruptions because of delays in documentation, notice response, or case processing.

Plans and providers, meanwhile, may encounter downstream effects on capitation rate adequacy, financial and membership forecasting, risk adjustment, care management continuity, quality performance, and network stability.

From Policy to Practice: A Systemwide Operational Shift 

Many elements of the IFR align with statutory provisions; however, it introduces new operational expectations that will reshape eligibility processes, including: 

  • Structured verification and documentation requirements听
  • Expanded exemption frameworks tied to functional ability to work听
  • New reporting and oversight obligations听
  • Increased reliance on enrollee notifications and engagement听

Collectively, these changes introduce a new layer of administrative expectations that extend beyond traditional eligibility and enrollment functions and require coordination across state and local agencies, health plans and providers, and community partners. 

Notably, CMS has provided targeted flexibilities鈥攑articularly through income-based compliance pathways鈥攚hich will allow states to leverage existing data sources and potentially reduce administrative burden, if implemented effectively. 

States Need to Build an Operational Foundation 

For state Medicaid agencies, the immediate priority is translating federal requirements into scalable, consistent processes. 

Key actions include: 

  • Redesign eligibility and听compliance听workflows.听States will need to听identify听affected populations, track compliance,听adjudicate听exemptions and hardships, and manage appeals鈥攁ll within tight implementation timelines.听
  • Invest in verification infrastructure.听Although automation opportunities exist,听particularly using income and existing eligibility data,听many determinations (e.g., medical frailty, caregiving, hardship) will require individualized review and new documentation standards.听
  • Strengthen cross-agency coordination and data integration.听Effective implementation will depend on integrating data from workforce, social services, and other programs to support compliance and reduce manual processes.听
  • Develop robust communication strategies. Experience from prior Medicaid initiatives demonstrates that coverage loss often results from administrative barriers, not ineligibility, making clear, proactive communication essential. 
  • Balance automation and administrative complexity.听States that effectively听leverage听automation and streamline enrollee-facing processes will be better positioned to听maintain听coverage continuity while meeting federal requirements.听

Implications for Health Plans: Expanding the Role of Member Engagement 

Health plans will play a pivotal role in implementation, although they cannot determine enrollee compliance with the new requirements. States rely on plans to identify members who may be subject to community engagement requirements, to assist with member communications, and to connect members with resources that support compliance or exemption eligibility. Even though these activities occur outside the traditional managed care financing framework, plans may be called upon to accomplish the following: 

  • Enhance outreach and education capabilities.听Plans are often the primary point of contact for members and will need to support awareness, compliance, and navigation of new requirements.听
  • Identify and support at-risk populations. Plans can help flag members likely to qualify for exemptions and assist with documentation and care coordination to reduce inappropriate disenrollment.
  • Prepare for enrollment volatility.听Increased churn听driven by documentation delays and administrative barriers听may affect financial performance,听care听continuity, and quality outcomes.听
  • Align with state expectations and funding constraints.听Because these activities fall outside traditional听Medicaid听benefits, states and plans must carefully define roles, accountability, and funding mechanisms.听

Implications for Providers: A New Interface with Eligibility Systems 

Providers, particularly safety net organizations, will be directly affected by new documentation and enrollee support responsibilities and should be prepared to address the following: 

  • Expand administrative and clinical workflows.听Providers will increasingly be asked to support medical frailty determinations, document functional limitations, and provide verification related to exemptions.听
  • Prepare for increased administrative burden.听New documentation requirements and coordination with plans and states will听require听operational adjustments, particularly for organizations serving large Medicaid populations.听
  • Mitigate impacts of coverage disruption.听Gaps in coverage鈥攐ften tied to procedural barriers鈥攎ay disrupt care continuity, particularly for high听need populations, and increase uncompensated care.听
  • Serve as a critical partner in engagement efforts.听Providers are uniquely positioned to听identify听at-risk individuals, educate patients, and support compliance,听making them essential to implementation success.听

Many of the most complex determinations鈥攕uch as medical frailty and caregiving鈥攃annot be fully automated, requiring nuanced policy design and consistent operational execution. As a result, successful implementation will depend on the following: 

  • Standardized documentation and review processes听
  • Integrated data systems and verification pathways听
  • Clear division of responsibilities听across听interest-holders听
  • Coordination across policy, operations, and frontline personnel听

Act Now to Influence Community Engagement Rollout 

States and stakeholders face dual, immediate priorities鈥攑reparing for implementation and engaging in the federal rulemaking process. CMS is accepting comments on the IFR through July 31, 2026, creating a critical opportunity to shape final policy while building operational readiness. At the same time, the compressed timeline to 2027 for implementation underscores the need for rapid decision-making on policy design, systems investments, and partner engagement. 

The Medicaid community engagement requirements represent one of the most significant operational transformations in the program鈥檚 60-year history. To succeed, organizations should act early, coordinate with interest-holders, and design implementation strategies that balance compliance, administrative efficiency, and coverage continuity. 

Now is the time to: 

  • Establish cross-functional governance and implementation plans听
  • Evaluate verification strategies and data integration opportunities听
  • Define roles and expectations across plans, providers, and partners听
  • Develop targeted communication and engagement strategies听
  • Conduct readiness assessments and system testing听

黑料不打烊 can actively support state policymakers, health plans, and providers as they in navigate these challenges. For details, access the full 黑料不打烊 Issue Brief and explore the Community Engagement State Support Hub.

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New Funding Approaches Prompt Maryland Healthcare Leaders to Reassess Strategies for Affordable Coverage

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Strategies to improve healthcare delivery, sustain coverage, and manage growing cost pressures resulting from federal policy changes and state budget dynamics were key topics of discussion at this year鈥檚 , May 21, 2026, in Baltimore, MD. Hosted by (SOR), an 黑料不打烊 Company, the program convened state policymakers and leaders of health plans, provider groups, and community-based organizations to examine the most pressing healthcare issues in Maryland.

Across sessions, participants explored key policy priorities, including Maryland鈥檚 implementation of the Rural Health Transformation Program (RHTP), efforts to stabilize and expand health insurance coverage, and early lessons from implementing the AHEAD (Achieving Healthcare Efficiency through Accountable Design) total cost of care (TCOC) model. 

Sustaining Medicaid and Marketplace Accessibility Amid Federal Policy Changes 

Throughout the conference speakers and attendees engaged on myriad issues and concerns resulting from the 2025 budget reconciliation act, now referred to as the Working Families Tax Cuts (WFTC) Act, and its potential impact on state Medicaid programs and coverage stability. Maryland Deputy Secretary for Healthcare Financing and Medicaid Director Perrie Briskin joined Johanna Fabian-Marks, Deputy Executive Director of the Maryland Health Benefit Exchange (MHBE), and Melissa Horn, Director of State Legislative Affairs at the Arthritis Foundation, to examine strategies for mitigating coverage loss and maintaining affordability. 

Speakers emphasized the need for improved coordination between Medicaid and the MHBE, including clear and consistent consumer communications and targeted outreach in counties most affected by federal policy changes. 

For example, Maryland leaders described several innovative approaches the MHBE is using to help people in the state maintain Marketplace coverage, including state-funded subsidies to offset the expiration of enhanced premium tax credits, streamlined auto-renewals, and simplified enrollment pathways for individuals identified as uninsured based on their tax and employment records. The state reported an 8 percent decline in enrollment in April 2026, noting that without these mitigation strategies, enrollment could have dropped by as much as one-third. 

The MHBE is using artificial intelligence (AI) to support document verification and is deploying a chatbot to help consumers navigate common questions. 

On the Medicaid side, the state is consulting multiple data sources鈥攊ncluding CRISP (Chesapeake Regional Information System for our Patients), labor, and education data鈥攖o verify eligibility and, compliance with community engagement requirements to reduce administrative burdens.

Rural Health Transformation Program Implementation and Early Priorities 

Maryland鈥檚 RHTP, supported by nearly $168.2 million in first-year funding from the Centers for Medicare & Medicaid Services (CMS), was a hot topic at the conference. State leaders and implementation partners emphasized the program鈥檚 role in addressing rural health disparities, strengthening care delivery infrastructure, and improving chronic disease outcomes.

Elizabeth Kromm, PhD, Assistant Secretary, Maryland Department of Health, outlined the three pillars of the state鈥檚 RHTP plan: 

  • Expand the rural healthcare workforce听
  • Increase access to integrated primary, specialty, and behavioral health services听
  • Address the underlying drivers of chronic disease through nutrition and food system interventions听

Together, these initiatives highlight Maryland鈥檚 focus on both clinical care delivery and broader population health strategies. 

State officials also discussed the funding opportunities  in April 2026, one of which seeks to support care delivery innovation, improve chronic condition management, and advance value-based care models. Speakers emphasized that connection is central to the program鈥檚 success鈥攂oth the strength of community relationships, the connections enabled through technology, and the integration of clinical and nonclinical services. 

AHEAD Model: Advancing Total Cost of Care and Population Health 

Maryland鈥檚 participation in CMS鈥檚 AHEAD Model represents a significant shift toward healthcare cost containment and system transformation. As one of the first states to implement the framework, Maryland is testing a statewide approach to managing TCOC while improving quality and population health outcomes. 

A panel discussion including leaders from the MedChi, Johns Hopkins, CareFirst Blue Shield, and Kaiser Permanente, addressed implementation considerations, open policy implications, and how providers and payers were approaching these changes in payment for healthcare services. Reimbursement strategies for primary care services were still uncertain and may differ significantly from those used under the Maryland TCOC model. Panelists also discussed what this model means in the broader healthcare environment of reductions in Medicaid payments resulting from the reconciliation legislation and additional funding coming from the Rural Health Transformation Fund. They also described how Maryland could serve as an example for other states working to implement AHEAD in the coming years. 

Speakers noted that successful implementation will require strong coordination among providers, payers, and state agencies, and more details are necessary to fulfill the requirements. The model鈥檚 10-year timeline positions Maryland as a leading test case for future federal and state efforts to scale TCOC approaches. 

AI in Healthcare: From Innovation to Real-World Impact 

AI鈥檚 role in healthcare delivery and policy continues to evolve, with growing attention on its practical applications and regulatory implications. A session led by 黑料不打烊 (黑料不打烊) Principal Brandon Greife, JD, and speakers from Microsoft AI, the Pair Team, the Center for Virtual Care, and b.well Connected Health explored how healthcare organizations conceptualize AI use cases to deploy solutions that demonstrate measurable impact. 

AI holds promise for improving care delivery, but realizing that potential requires navigating ethical, regulatory, and operational challenges. Mr. Greife led a panel discussion on how the healthcare industry is transitioning from abstract use cases for AI toward evaluating the real-world impact of deployed solutions. 

Session speakers also explored how healthcare is advancing from AI tools that support clinicians and payers to patient-facing AI that supports care navigation, chronic disease management, and community outreach. They rounded out the session with a focus on fundamentals of healthcare鈥攃oncepts like data quality, clinical trust, patient safety, and demonstrated value at the point of care. 

Looking Ahead 

If you are looking for strategies and solutions to address urgent healthcare policy and operational challenges, 黑料不打烊 experts are available to help you navigate these complex changes and identify practical paths forward. 

Through the ,  partnership events, and other 黑料不打烊 convenings across the country, we connect state leaders, providers, health plans, and community stakeholders to share insights, elevate lessons, and advance solutions. Join us at an upcoming event鈥攊ncluding our next 黑料不打烊 National Conference in New Orleans, LA on October 5-7, 2026鈥攐r explore additional opportunities to engage with 黑料不打烊 and access the full schedule of conferences and resources. 

State of Reform develops its conference agendas through collaboration with 黑料不打烊 subject matter experts/market leads and stakeholders across the public and private sectors, including state officials, community-based organizations, providers, payers, and more. 

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Medicaid State Directed Payments: CMS Proposes Major Changes to Financing and Oversight

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The Centers for Medicare & Medicaid Services (CMS) proposed changes to state directed payments mark a significant inflection point for Medicaid financing. For states, plans, and providers, the coming months will be critical in understanding the rule鈥檚 final shape鈥攁nd how they can position themselves for a more constrained and standardized payment environment.

Federal Medicaid policy is entering a period of rapid change. Policymakers are advancing a series of interconnected proposals鈥攊ncluding Medicaid community engagement (work) requirements, program integrity initiatives, and new scrutiny of financing mechanisms that shape how dollars flow through the program. 

Among the most significant developments: the CMS鈥檚 proposed changes to Medicaid state directed payments (SDPs). As outlined in 黑料不打烊鈥檚 recent Issue Brief, the proposal signals a meaningful shift in how federal policymakers approach provider reimbursement, managed care financing, and oversight of supplemental payment arrangements. 

黑料不打烊 (黑料不打烊) will further examine these developments in future articles, briefs, and its Medicaid summer webinar series, which will focus on SDPs, work requirements, and program integrity鈥攖hree policy areas now moving in parallel and reshaping the Medicaid landscape. This article provides an executive overview of the SDP rule. 

What are Medicaid State Directed Payments? 

State directed payments (SDPs) are a key Medicaid financing tool that allows states to direct how managed care organizations reimburse providers. 

States use SDPs to: 

  • Increase provider payment levels听
  • Target specific provider types or services听
  • Support delivery system reforms听

Over time, SDPs have become a central component of Medicaid managed care financing. As the 黑料不打烊 issue brief emphasizes, their growing scale and complexity have drawn increased federal scrutiny. 

What Does CMS Propose to Change? 

The CMS proposed rule implements the statutory changes approved in the 2025 budget reconciliation act (P.L. 119-21, which CMS refers to as the Working Families Tax Cut Act, or WFTCA). The rule introduces a new framework for how SDPs are structured, regulated, and reviewed. Based on 黑料不打烊鈥檚 analysis, the proposal advances several core policy shifts: 

  1. Expanded听Federal Limits on Payment Levels.听CMS proposes new constraints on how much states can direct plans to pay providers, extending payment limits across a broader range of services and delivery systems. Specifically, CMS proposes to lower the payment ceiling for all SDPs to either 100 percent of Medicare for states administering Affordable Care Act (ACA) expansion programs or 110 percent of Medicare for states without an ACA expansion program. CMS plans to grandfather certain SDPs at levels above Medicare and provide a transition period with an annual 10 percent reduction until the payments are reduced to Medicare levels. In addition, this rule proposes听limiting SDPs to the total published Medicare payment rate at the service level鈥攁 departure even from Medicaid fee-for-service (FFS) upper payment limits, which are limited to a reasonable estimate of what Medicare would pay but are calculated at the aggregate level by ownership class.听
  2. Extends Limits听Across Programs听and Delivery Systems.听The proposal听seeks听to align听the limitations on practitioner payments under听fee-for-service听with the new limitations on SDPs. If a state makes payments to a subset of targeted practitioners, the new proposed limit would be actual Medicare payment rates applicable to the practitioner or provider for the same听time period听as the Medicaid state plan rate year.听The crosswalk of Medicaid payment rates to Medicare will听likely be听administratively burdensome鈥攅specially for states that set Medicaid rates using an entirely different听methodology听than Medicare鈥檚. Applying the Medicare payment limit at the service level will limit states鈥� ability to incentivize certain service types that may need enhanced reimbursement amounts to preserve access to care (e.g., primary care, neonatal, etc.).听
  3. Broader Applicability Across Providers.听The changes extend beyond a narrow set of provider types, affecting a wider range of stakeholders听participating听in Medicaid financing and delivery.听For example, the WFTCA听called for the reduced payment ceiling to be applied to the specified four classes of providers. This rule proposes that all providers be limited to the same ceiling and that the revised limits also apply to US territories.听

Why Is CMS Focusing on State Directed Payments Now? 

As highlighted in the 黑料不打烊 Issue Brief, federal policymakers are increasingly focused on the growth and complexity of SDPs as well as the role of SDPs in broader Medicaid financing strategies. In addition, CMS policy officials are prioritizing program integrity and fraud, waste, and abuse and have couched the current SDP policies as inefficient use of taxpayer dollars. 

These priorities align with a broader shift toward tighter federal oversight of Medicaid funding mechanisms. 

What Are the Implications for States, Plans, and Providers? 

The proposed changes have wide-ranging implications across the Medicaid ecosystem. 

States: SDPs have been a flexible tool for shaping payment policy and directing resources. New federal parameters may limit that flexibility and require states to reassess existing financing strategies. 

Health Plans: Plans may face a more standardized and regulated environment for implementing SDP arrangements, with less variation driven by state policy choices. 

Providers: Many providers rely on SDPs to supplement base Medicaid payment rates. Changes to these payments could affect reimbursement levels and financial stability, particularly for organizations serving large Medicaid populations. 

As the 黑料不打烊 brief underscores, the impact will vary significantly by state, depending on how SDPs are currently structured. 

How This Fits into Broader Medicaid Policy Changes 

CMS is advancing a broader recalibration of how SDPs fit within Medicaid policy. However, the SDP proposal is also part of a larger set of federal Medicaid policy developments, including: 

  • Medicaid community engagement (work) requirements听and other changes to eligibility and redetermination rules听included in听a June 1, 2026,听interim final rule听
  • Program integrity and oversight initiatives听
  • Changes to financing structures and supplemental payments听

Taken together, these policies signal a transition toward greater federal standardization and increased oversight of funding flows. 

What Should Stakeholders Watch Next? 

CMS鈥檚 proposed changes to Medicaid state directed payments mark a turning point in Medicaid financing policy. 

Stakeholders should expect continued movement toward greater oversight, tighter payment parameters, and increased consistency across the program. They should begin planning now for a more constrained and standardized payment environment. Key questions center on: 

  • How CMS will implement and phase in payment limits across states听
  • The extent to which existing arrangements will be grandfathered听in听or phased down听
  • How states respond in redesigning Medicaid payment strategies听

The proposed SDP rule is open for public comment through July 21, 2026, with final policy decisions expected following federal review. As pending issues are resolved, stakeholders across the Medicaid landscape will need to reassess financial models, policy approaches, and operational strategies. 

Stakeholders should begin evaluating potential impacts now, as the policy direction is clear, even if final details are still evolving. 

Staying Ahead of Medicaid Financing Changes 

Given the pace and breadth of these developments, staying informed is critical. 黑料不打烊鈥檚 upcoming Medicaid summer webinar series will provide timely analysis of the SDP proposal alongside related policy changes, including community engagement and work requirements and program integrity initiatives. These sessions are designed to help states, plans, and providers understand policy changes and prepare for operational and financial implications, identify compliance gaps, and address sustainability issues. Register for one or multiple webinars here.  

To understand how these Medicaid policy changes affect your organization, contact one of 黑料不打烊鈥檚 Medicaid experts. 

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Connecting the Dots: Key Trends, Plan Shifts, and 2027 NBPP Changes Affecting ACA Marketplace Enrollment

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Explore how 2026 ACA Marketplace enrollment shifts, plan selection trends, and the 2027 NBPP changes are impacting affordability, market stability, and state strategies. 

Recent 黑料不打烊 (黑料不打烊) webinars and reports discussed that Affordable Care Act (ACA) Marketplace enrollment trends are evolving rapidly and the takeaways go beyond total enrollment numbers. In addition in May, the Centers for Medicare and Medicaid Services (CMS) finalized the 2027 Notice of Benefit and Payment Parameters (NBPP), introducing new flexibility for plans and states alongside stronger program integrity requirements. 

To understand how these changes are reshaping the ACA Marketplace,  Andrea Maresca鈥痵poke with鈥�Zach Sherman, Managing Director for Coverage Policy and Program Design at 黑料不打烊 as well as , PhD, Principal鈥痑t Wakely, and , Principal at Leavitt Partners, both 黑料不打烊 companies.

Q: The recent Wakely analysis has been central to understanding what鈥檚 happening with ACA enrollment. What should people be paying closest attention to? 

Michael Cohen: The key takeaway is that ACA Marketplace trends are about much more than the enrollment numbers. The plans consumers choose, how long they maintain coverage over the course of 2026, and the evolving picture of the morbidity and demographics of the enrolled population are all critical factors for understanding the ACA Marketplace.

翱耻谤听谤别肠别苍迟听听found that听only about 86 percent of enrollees paid their firstpremium听in听2026.听That鈥檚听a strong indicator that affordability pressures are already affecting coverage听stability.听听

Q: Where are these enrollment changes showing up most clearly?  

Michael Cohen: One data point that stood out is the number of new consumers in 2026, which was down 13 percent compared with prior years.  

The impact also shows up in coverage losses and consumer plan selection. Some consumers are dropping coverage altogether, while others are making tradeoffs to stay covered. These consumers are moving to lower-premium products鈥攑articularly from silver to bronze plans鈥攚hich offer less robust coverage and higher out-of-pocket costs. Both trends matter, especially when thinking about access and financial risk. 

Q: How are enrollment shifts affecting broader ACA Marketplace stability? 

Zach Sherman: It varies by state, but there are notable trends. States that are using the Federally Facilitated Exchange (FFE) and expanded Medicaid saw the largest enrollment declines.  

Notably, non-expansion states on the FFE significantly outperformed expansion states. This was surprising because, with enhanced subsidies ending, the biggest net premium hit consumers would feel is at the lowest income levels, yet that鈥檚 where we saw most enrollment growth. 

Across the individual states, the enrollment shifts have real implications for stability. When healthier individuals leave the market鈥攐r shift to less comprehensive coverage鈥攊t can put pressure on premiums and risk pools. Issuers are taking this information to begin to make estimates for their 2027 pricing and what this means for their 2026 performance.  

At the same time, CMS is introducing new flexibilities in the final 2027 Notice of Benefit and Payment Parameters. 

Q: What are the most important changes in the 2027 final rule? 

Zach Sherman: Broadly, the rule makes a clear push toward increased flexibility for consumers, plans, and state regulators. 

One of the categories of changes is around expanded availability of lower premium plans with higher out-of-pocket costs. For example, catastrophic plans can now be offered for up to 10 years. 

CMS also removed certain requirements for standardized plans and relaxed limits on non-standard plan offerings. That gives issuers more room for plan design innovation, but it also means a more complex landscape and plan selection experience for consumers. 

One of the most notable changes is the introduction of non-network plans as qualified health plans. These plans don鈥檛 rely on traditional provider networks, which could lower costs while introducing new considerations for access and consumer experience.  

We鈥檙e seeing a shift toward allowing more tailored options and potentially less standardized marketplace programs. It will require a different approach from regulators, and it creates a different type of experience for consumers.  

Q: CMS is intensely focused on addressing fraud, waste and abuse. How is that playing out in the Marketplace program? 

Zach Sherman: Program integrity is a central theme in the 2027 final rule, too. It includes stronger eligibility verification, increased oversight of brokers and marketing practices, and new safeguards to reduce improper enrollments. So while there鈥檚 more flexibility in plan design, CMS is pairing it with more scrutiny on how the system operates. 

Q: Where do states fit in all of this? 

Zach Sherman: The final rule gives states more authority in key areas, including oversight of plan network adequacy and essential community provider compliance. We鈥檙e deep into discussions with states and health plan issuers about the changes they鈥檙e interested in exploring for their state. States will have to decide how to use that flexibility to balance affordability, access, and stability. 

Although many of the provisions take effect in the 2027 plan year, regulators and plans are receiving this information fairly late in the cycle which will make it difficult to incorporate some of the flexibilities. We鈥檙e anticipating robust discussions to continue next year and expect to see more variation starting in plan year 2028. 

Differences and Alignment in Federal ACA Marketplace Policy Discussions  

Q: Stepping back from the 2027 NBPP, what should interest-holders know about the evolution of the broader policy landscape? 

Liz Wroe: Members of Congress will need to see the 2027 rates being filed before they consider taking action. Even then, there鈥檚 no consensus on several key issues that prevented a bipartisan deal to bring back enhanced subsidies in 2025. 

Instead everyone has transitioned to a larger affordability conversation, and we鈥檒l spend this year working on the policies with a goal of moving forward in 2027.  

There are different approaches to affordability and coverage that are driven by fundamentally different philosophies on how to structure the market. Some proposals focus on expanding subsidies, reducing cost sharing, and strengthening ACA protections. Others emphasize consumer-directed models like defined contributions, health savings accounts, and expanded use of ICHRAs [Individual Coverage Health Reimbursement Accounts] as well as broader access to lower premium plans. 

There are also several areas of bipartisan alignment. Prior authorization reform is a big one. There鈥檚 broad agreement that the current system creates administrative burden and delays in care. 

We鈥檙e also seeing common interest in policy approaches to strengthen medical loss ratio [MLR] requirements, expand price transparency, and address provider consolidation. 

Even if there is divided government after the November elections, these are areas where policy action may be more likely. States, health plans, providers, and other interest holders will want to monitor these issues now for signals of what may move forward later this year or in the next Congress. 

Stakeholder Opportunities to Inform Marketplace Programs 

Q: What should stakeholders be focused on right now? 

Michael Cohen: For issuers, it鈥檚 about understanding how these changes affect pricing, enrollment, and risk. There鈥檚 more uncertainty in how plans should be priced. 

Zach Sherman: For states, the focus should be on strategy. The choices they make now on plan oversight, market structure, and consumer protections will shape outcomes for several years. Additionally, there were several proposed Marketplace policies that CMS did not finalize in the 2027 rule鈥擲tate-Based Exchange Enhanced Direct Enrollment Model鈥攖hat CMS is likely to revisit in future rules, including the 2028 NBPP.   

Liz Wroe: Broadly, stakeholders should recognize that we鈥檙e in a transition period. The market is evolving, and policy is still catching up. 

Connecting the Dots: Enrollment, Rules, Regulators, and the ACA Marketplace 

For stakeholders across the healthcare landscape, navigating this environment requires both technical expertise and strategic insight. 

黑料不打烊 works across policy, actuarial, and operational domains to help states, health plans, and other stakeholders translate these developments into actionable strategies鈥攚hether that means evaluating market risk, designing programs, or preparing for future policy scenarios. 

To explore these issues in more detail, access 黑料不打烊鈥檚 webinar discussions and briefs, including: 

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What听you missed in 2025鈥攁nd why you should join us in 2026听

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Last year鈥檚 黑料不打烊 conference brought together healthcare leaders to confront a changing landscape across Medicare, Medicaid, and the Marketplace. The agenda reflected the issues shaping the industry in real time: public policy in motion, the future of value-based care, behavioral health innovation, digital transformation, population health, and the partnerships needed to turn strategy into results. From keynote and plenary conversations to focused workshops and collaborative small-group sessions, attendees were immersed in practical discussions about what comes next. 

Want a quick look at what made the 2025 conference so valuable?  

Those conversations matter even more now. Join 黑料不打烊鈥檚 annual conference, US Healthcare 2026: Signals, Signs & Flashing Lights, October 5鈥�7 in New Orleans. This year鈥檚 event is designed for executives and leaders across providers, payers, government, and the organizations that enable care delivery, with a clear focus on helping attendees navigate financial pressure, performance demands, and AI-driven change. Early registration is already underway, with early-bird pricing available through August 7. 

If you look back at last year鈥檚 agenda, you can see how well it anticipated this moment. In three fast-moving days, this year鈥檚 conference will help attendees read policy and market signals earlier and translate them into decisions, manage risk and costs while protecting outcomes and access, learn what is working to sustain systems of care amid uncertainty, how to apply AI and emerging technology through real operational and clinical use cases, and build relationships through structured networking across sectors. These priorities come to life across four central themes: managing risk and costs, sustaining systems of care, AI and innovation, and partnerships and collaboration. Together, they reflect exactly what healthcare leaders need now: practical strategies for a more complex environment, clearer paths to stability, measurable approaches to innovation, and stronger models for delivery and community impact. 

The 2026 conference is not just another industry event. It is an opportunity to step away from day-to-day demands and engage with peers facing the same questions about cost, risk, performance, access, and technology adoption. Whether you lead strategy, operations, policy, clinical transformation, product development, or partnerships, you will leave with practical insights you can put to work right away. The value is not only in hearing what is next, but in understanding what to do now. 

Attendees this year can expect the same cross-sector depth that stood out last year, paired with even greater urgency. The forces affecting Medicare, Medicaid, Marketplace, and adjacent programs are not moving in isolation. Payment reform connects to access. Digital transformation connects to quality and workforce realities. Behavioral health connects to community capacity, and long-term sustainability, and governmental policy changes drive all of the above. The organizations that succeed will be the ones that can see these connections early and act on them thoughtfully. 

Last year鈥檚 conference showed the value of bringing more than 350 policymakers, providers, payers, advisors, innovators, and community leaders into the same conversation. This year offers the chance to continue that conversation at exactly the right time. If you want insight that is strategic, grounded, and immediately relevant to the decisions in front of you, come join us in New Orleans this October. 

 to take advantage of Early Bird pricing, which ends August 7. 

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Michigan Health Policy Conference 2026: Medicaid, OBBBA, and State Budget Impacts

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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,  (SOR), an 黑料不打烊 Company, hosted its annual , 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鈥檚 budget outlook, and the Rural Health Transformation Program (RHTP). 

Michigan DHHS鈥檚 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鈥檚 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鈥檚 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鈥攊ncluding Danielle Devine, Market President at McLaren Health Plan, and Jen Flood, Budget Director for the State of Michigan鈥攈ighlighted how OBBBA is already reshaping Michigan鈥檚 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鈥檚 $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鈥檚 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  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, 黑料不打烊 experts are available to help navigate these complex changes and identify practical paths forward. 

黑料不打烊 (黑料不打烊),  brings together state leaders, providers, plans, and community organizations to surface real-world strategies for navigating federal change. Join us in  on May 21, 2026, or visit the  to view the full conference schedule and register for an upcoming event. 

State of Reform develops its conference agendas through collaboration with 黑料不打烊 subject matter experts/market leads and stakeholders across the public and private sectors, including state officials, community-based organizers, providers, payers, and more. 

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National Collaborative Launched to Strengthen US Behavioral Health Crisis System

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National Alliance on Mental Illness (NAMI) and 黑料不打烊 (黑料不打烊) launch the National Collaborative for Crisis Systems Innovation 

The United States is facing an escalating behavioral health crisis, with growing demand for mental health and substance use services and persistent gaps in access to timely, appropriate care. In response, the National Alliance on Mental Illness (NAMI) and 黑料不打烊 (黑料不打烊) have launched the National Collaborative for Crisis Systems Innovation, a new initiative focused on improving how the United States responds to people in mental health crisis. 

This collaborative effort comes at a critical moment for the national crisis response system, as policymakers, providers, and communities work to build on recent investments and make further progress on sustainable, systemwide changes so that people experiencing a mental health crisis receive the care they need and deserve. 

The Crisis Response System Still Needs Improvement 

The launch of the 988 Suicide & Crisis Lifeline in 2022 marked a major milestone, making it easier for individuals to access immediate behavioral health support. Although the 988 Suicide & Crisis Lifeline has driven recent progress, significant challenges remain in the US mental health crisis system, including: 

  • Rising demand for crisis services听
  • Limited access to community-based behavioral health听services听
  • Fragmentation across crisis responses systems听
  • Overreliance on emergency departments and law enforcement听

Experts increasingly agree that 988 is only one component of a comprehensive crisis system. Effective systems must also include: 

  • Mobile crisis response teams听
  • Crisis stabilization facilities听
  • Ongoing care coordination and follow-up services听

The National Collaborative represents the next phase of work and will focus on connecting these pieces into a more integrated and sustainable system. 

The National Collaborative Is a New Phase of Crisis System Transformation 

Building on four years of foundational work since the 988 Suicide & Crisis Lifeline launched in 2022, the National Collaborative is designed to strengthen the full continuum of behavioral health crisis care, from initial contact to stabilization and follow-up services. 

Its overarching goal is to ensure that individuals experiencing a mental health crisis receive timely, appropriate care rooted in dignity and support. The National Collaborative will: 

  • Serve as a nationwide听hub for coordination, learning, and action听
  • Bring together public and private stakeholders听across sectors听
  • Support听states and communities in building coordinated, person-centered crisis response systems听
  • Advance innovation and shared solutions to improve outcomes听

The launch of this collaborative also reflects a broader shift in national focus鈥攆rom expanding access to improving system performance and long-term sustainability. This approach recognizes that meaningful progress will require coordination across healthcare, social services, and community-based organizations. 

Why This Matters 

For state Medicaid agencies, health plans, and providers, the collaborative provides a platform to: 

  • Learn from peers across states and sectors听
  • Access emerging policy and implementation insights听
  • Align local strategies with national priorities in crisis care听

As crisis system transformation accelerates, coordinated efforts like this one will be essential to sustain momentum and improve outcomes. 

In the coming months, NAMI and 黑料不打烊 will engage key interest-holders and experts to identify and elevate the urgent needs in crisis response and ensure alignment on shared outcomes to improve crisis systems. Public and private organizations interested in improving behavioral health crisis systems are encouraged to engage with the . 

For more information on 黑料不打烊鈥檚 work in Crisis services, contact鈥�Monica Johnson, Managing Director, 黑料不打烊. 

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Special Alert: CMS Proposes Major Medicaid Payment Reform to Cap State-Directed Payments and Align Rates with Medicare

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On May 20, the Centers for Medicare and Medicaid Services (CMS)听听a proposed rule aimed at curbing state Medicaid payment practices that federal regulators have driven excessive federal spending without clear improvements in care. The rule, which implements new statutory requirements approved as part of the 2025 budget reconciliation act (P.L. 119-21, OBBBA) proposes to cap certain state-directed and targeted provider payments and is seeking to better align them with Medicare payment levels. These financial arrangements include healthcare related provider taxes and intergovernmental transfers.

If finalized,听CMS听projects the听rule will听result听in听significant听federal听savings over time and听will听refocus Medicaid funding on patient care, strengthen oversight, and ensure that supplemental payments are tied to measurable improvements in quality, access, and outcomes rather than financing strategies that increase costs without corresponding value.听黑料不打烊听(黑料不打烊)听experts are听continuing to听review听the proposed Medicaid payment reform听and will provide听additional听analysis in听future听newsletters and communications to听interest-holders.听听

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