Following the enactment of the largest Medicaid cuts in history, we anticipated a flurry of Medicaid activity in state legislative sessions. State legislators were left to fill the budget holes made by H.R.1, figure out how to implement H.R.1-mandated policies like work reporting requirements, and (hopefully) mitigate some of the associated coverage losses. Ten state legislative sessions (Florida, Indiana, New Mexico, Oregon, South Dakota, Utah, Virginia, Washington, West Virginia, and Wyoming) have either already ended or are wrapping up by the end of the month. CCF researchers have been keeping track of what Medicaid-related bills that are being considered in these legislative sessions.
Let’s start with some positive news for children and families.
Two of these state legislatures have introduced measures that would expand access to coverage. Virginia has proposed budget amendments to increase CHIP eligibility to 305% of the federal poverty level (FPL) and merge their separate CHIP program into Medicaid (which helps promote continuity of coverage as family incomes may change and improves government efficiency by integrating systems). Virginia’s legislature also proposed establishing a workgroup focused on mitigating coverage losses for children. Lawmakers in Washington introduced a bill to increase Medicaid eligibility to 300% FPL (this bill has not seen movement since it was referred to committee in mid-January).
States are clearly reckoning with the budget holes created by the historic Medicaid cuts of H.R.1, such as its provider tax restrictions (as well as other H.R. 1 cost-shifts related to SNAP and tax conformity, under which the federal-level tax cuts can automatically reduce state revenues).
Several state legislatures are pursuing increased state spending or changes to allocations of state funds to mitigate these cuts. Oregon’s legislature passed a bill that would allow the use of state funds to pay nonprofit reproductive health care providers (such as Planned Parenthood) who are currently excluded from being a Medicaid participating provider under H.R. 1. This will help continue access to critical services including preventive screenings, family planning, contraceptives, and certain primary care services. Another proposed Virginia budget amendment would replace expired ACA enhanced subsidies using state-only funds. New Mexico’s HB 2 (their state budget) includes $40 million in state funds to provide health coverage for lawfully present immigrant Medicaid enrollees, and HB4 will increase distributions in the state’s Healthcare Affordability Fund and Behavioral Health Program Fund through a surtax levied on health insurance companies. This fund will help pay for expired ACA subsidies and Medicaid cuts. West Virginia’s House budget bill, HB 4027, increases Medicaid funds using general revenue funds. In many cases, states will have to resort to budget cuts in response to H.R.1. In Oregon, the legislature directed all agencies to propose budget cuts of up to 5%, in an attempt to claw back some of the revenue the state is slated to lose because of H.R.1.
One cause for the budget gaps facing states is H.R.1’s restrictions on the ability of states to finance Medicaid through provider taxes. One of these restrictions prohibits certain existing provider taxes with “uniformity” waivers. West Virginia’s legislature passed HB 5459, which attempts to come into compliance with this uniformity waiver prohibition – however, it remains unclear whether this attempt to change a provider tax to come into compliance with H.R.1 would run afoul of the prohibition against new taxes or increases in existing taxes. CMS guidance on this issue remains vague.
The Rural Health Transformation Fund (RHTF) was established as part of H.R.1 to help soften the impact of Medicaid cuts on rural hospitals, and the first awards to states were announced at the end of 2025. State proposals for RHTF varied widely, ranging from technological innovation to community health programs. South Dakota passed HB 1044, requiring the Department of Health, which will be administering RHTF in the state, to submit quarterly expense reports to the legislature, likely a means to gain oversight into how these funds are used. Indiana’s SB 1, signed by the governor earlier this month, also establishes legislative oversight of RHTF. While transparency into how states are using RHTF funds is important, we’re reminded that the $50 billion allocated to RHTF is temporary and highly inadequate to protect rural areas from the impact of these cuts. The fact that CMS unilaterally imposed an arbitrary 15% cap on states’ use of RHTF funds for rural hospitals and health care providers means H.R. 1 Medicaid cuts will likely exacerbate the financial struggles of rural hospitals and health care providers and continue to put many of them at risk of closure.
At least five of these states have measures to codify the Medicaid (and in many cases, SNAP) provisions of H.R. 1 in state code. These states include Florida, Indiana, Utah, West Virginia, and Wyoming. Of particular concern are bills that are attempting to go further than the already harmful provisions of H.R.1. For example, H.R.1 requires redeterminations every six months for the adults enrolled through Medicaid expansion. Indiana’s SB 1 requires biannual redeterminations for most non-elderly, non-disabled adults, not just the expansion adults. SB 729 in West Virginia would seemingly apply biannual redeterminations to the entire Medicaid population. Recent CMS guidance reiterated that H.R.1 requires biannual redeterminations only for the expansion group.
H.R.1 eliminates eligibility of many lawfully present immigrants for Medicaid and CHIP. The first draft of Florida’s HB 693 would have effectively reversed the state’s bipartisan adoption of the ICHIA option for lawfully residing children in Medicaid and CHIP, therefore eliminating an important pathway for immigrant children to continue to access health coverage – but a recent amendment to the bill preserves this option. In addition to their H.R.1 codification, Utah’s failed HB 88 proposed requiring proof of lawful presence for applicants of public assistance programs aged 18 and older and went as far as to threaten the possibility of criminal penalties for government employees who failed to verify an applicant’s residency status. While promoted as a means to prevent undocumented immigrants from accessing public assistance programs, in reality, bills such as HB 88 would only increase administrative burden for states and have a “chilling effect” on mixed-status families, who may be reluctant to enroll in public coverage for fear of negative consequences. As we’ve written about time and time again, undocumented immigrants have never been eligible for full Medicaid coverage.
H.R.1 requires implementation of work reporting requirements in states that have adopted Medicaid expansion or an expansion-like group through a Section 1115 demonstration. Bills in Indiana, Utah, and West Virginia attempt to codify these work reporting requirements – but often propose the strictest implementation of H.R.1-mandated policies, reject options meant to provide more flexibility to states, or go beyond what is required by H.R.1. For example, Indiana’s SB 1 adopts a lookback period of three months, and West Virginia’s HB 5645 proposes the same (H.R.1 requires applicants be compliant with work reporting requirements for at least one, and up to three, consecutive months prior to application). Both require verification of compliance at least quarterly. Bills in all three states limit use of self-attestation for verification of eligibility or compliance with the work reporting requirement.
H.R.1 also has non-expansion states pondering their own work reporting requirements. As Joan Alker and I recently wrote about, Florida, a state that has not taken up Medicaid expansion, has a bill pending in the legislature that would impose work reporting requirements on very low-income parents and create a horrible Catch-22 situation: if the parent does not work, they will lose their Medicaid coverage, but if they work the number of hours required by the bill, their income will become too high to qualify for Medicaid.
H.R.1 and many of these state bills are spurred by the ongoing false and misleading attacks from the Trump administration claiming fraud in Medicaid. Indiana’s SB 1 aims to “toughen eligibility and verification rules” for Medicaid. The Wyoming Senate passed SF 106, the “Welfare Fraud Prevention Act Amendments.” Restrictions to immigrant eligibility are largely motivated by incorrect and unfounded beliefs about undocumented immigrants accessing Medicaid coverage. As my colleague Andy Schneider continues to emphasize, the provisions of H.R.1, and these subsequent attempts by state legislatures to codify H.R.1, do not meaningfully address fraud in Medicaid.
The legislative landscape remains a complex tug-of-war as states scramble to patch budget holes and quickly implement H.R.1. While some lawmakers are fighting to protect access, many others are doubling down on measures to further restrict access to health care. While this blog only looks at ten states, variations of these bills are making their way across the country. As state legislative sessions progress, we’ll continue to monitor how states are navigating the new reality of H.R.1.