Since inauguration day, President Donald Trump’s second administration has prioritized reshaping federal health care policy in ways that could undermine affordability and access. Recent executive orders from President Trump, along with the House Republican budget resolution, point to significant changes that could make it harder for millions of Americans to get and afford the care they need. For example, $880 billion in potential Medicaid cuts threaten to shift costs to states, jeopardizing their budgets and potentially eliminating coverage for 15.9 million Americans.1 Moreover, a shuttered Consumer Financial Protection Bureau (CFPB) and a less aggressive Federal Trade Commission would weaken federal oversight of health care industry activity, which in turn could increase costs for families and state budgets; erode consumer protections; and accelerate consolidation in the already heavily concentrated health care market, further limiting competition and threatening access to care.2
Fortunately, state leaders have a key opportunity to make health coverage more affordable, ensure more people can get the care they need, protect residents from harmful industry practices, hold health care providers and insurers accountable, and increase competition to lower costs. This issue brief lays out 10 targeted actions that state policymakers can take now to push back against the Trump administration’s agenda.
1. Set out-of-pocket limits for prescription drugs
In 2023, 6 in 10 Americans reported taking at least one prescription drug; however, nearly 1 in 3 reported that it was somewhat or very difficult to afford the cost of their medication.3 The Inflation Reduction Act established an annual $2,000 out-of-pocket prescription drug cost cap for Medicare Part D enrollees, which went into effect in 2025, and states can further alleviate the financial burden on residents who rely on lifesaving prescription drugs with other types of coverage.4 Specifically, states can and should limit consumer out-of-pocket costs—including by placing limits on copayments, coinsurance, and deductibles—for high-need prescription drugs such as insulin, inhalers, epinephrine injectors, and cancer medications. Several states, including New Jersey, Colorado, Illinois, Maine, and West Virginia, have passed laws capping cost sharing for insulin, and Delaware, Maryland, and California have implemented monthly copay caps on specialty drugs.5 A 2024 study of Colorado’s $100 insulin cap found that Type 1 diabetics spent an average of $18 to $20 less per month for their insulin.6 To ensure that out-of-pocket caps have the greatest impact on the greatest number of residents, states should extend the coverage standard to both state-sponsored health plans and the commercial market.
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2. Redesign marketplace and state employee health plans to improve affordability and reduce financial barriers for consumers
State policymakers can leverage their authority to regulate state-based standardized plans to remove financial barriers for consumers and improve the value of insurance for target populations such as people with chronic conditions.7 For example, beginning in 2025, standardized plans on DC Health Link have no copays, deductibles, or coinsurance for residents seeking treatment for cardiovascular and cerebrovascular disease, including doctor visits and medications.8 With this change, DC Health Link is hoping to narrow disparities in cardiovascular health outcomes between white residents and Black and Hispanic residents.9
Similarly, states should pilot innovative coverage models within their own employee health benefit plans. States can implement programs with zero cost sharing for high-value care, such as maternity care and chemotherapy. For example, beginning in 2018, to reduce the progression and costs associated with chronic disease, Minnesota’s State Employee Group Insurance Program reduced out-of-pocket costs for select diabetic services including office visits, labs, medications, and testing supplies.10
3. Codify key ACA consumer protections into state law
In response to anticipated federal efforts and continued legal challenges to undermine the Affordable Care Act (ACA), states that have not yet done so should codify into state law the ACA’s key consumer protection provisions.11 States should prioritize enacting legislation or issuing regulations to guarantee protections for consumers with preexisting conditions, require zero-cost coverage of preventive services, eliminate annual and lifetime limits, extend dependent coverage up to age 26, prohibit gender rating for insurance premiums, and establish nondiscrimination standards.12
Seventeen states have yet to extend dependent coverage consistent with the ACA, 34 have not prohibited gender rating, 33 states have yet to protect access to preventive services without cost sharing, and 38 have not prohibited discrimination based on sexual orientation and gender identity.13 Codifying these protections would ensure that critical health care safeguards remain intact for residents regardless of federal policy changes.
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4. Increase accountability related to hospital medical debt collection
In 2022, 41 percent of adults in the United States reported debt from medical or dental expenses, and most owed money to hospitals.14 Medical debt burdens millions of Americans, and yet the Trump administration has halted operations of the CFPB, which was poised to enforce new rules on medical debt.15 One way states can reduce residents’ vulnerability to medical debt is to ban harmful billing and collection practices. In 2024, Los Angeles County passed legislation requiring hospitals to notify the county public health department when they initiate debt collection, sell medical debt to a collections agency, garnish wages, seize assets, inform a consumer reporting agency, or take other actions against patients for unpaid medical bills.16 States can use these data to identify predatory billing practices and develop targeted policy interventions to address medical debt and reduce its impact on vulnerable populations.
5. Establish strong patient and consumer protections
A 2023 KFF survey found that 58 percent of adults reported encountering insurance-related issues in the preceding 12 months, including prior authorization and claims denials.17 To address these challenges, states should implement reforms that both hold insurers accountable for unreasonable delays or denials and also protect consumers from the financial hardship these practices can cause. Some states have already taken such actions:
- In 2024, Illinois enacted the Health Care Protection Act, which bans prior authorization for inpatient adult and children’s mental health care and requires insurers to publicly disclose which treatments require authorization.18
- Wyoming’s 2024 Ensuring Transparency in Prior Authorization Act requires insurers to respond within 72 hours for urgent cases and within five calendar days for nonurgent ones.19 The law also establishes a grace period during which insurers must honor existing prior authorizations when a patient transitions to a new plan.20
- In 2024, the Pennsylvania Insurance Department launched the Independent External Review program, providing consumers with a state-level avenue to appeal denied health insurance claims, resulting in more than 50 percent of appealed denials being overturned in its first year.21
Additionally, many people remain unaware of their rights as health care consumers. This lack of awareness leaves them vulnerable to unfair treatment, surprise medical bills, and aggressive debt collection practices.22 The same 2023 KFF survey found that 51 percent of respondents were unsure of their right to appeal insurance decisions, and 76 percent did not know which government agency to contact for assistance with insurance problems.23
To better protect consumers, states can establish and publicize a clear patient bill of rights to help ensure that individuals understand their existing protections, as well as enact comprehensive legislation that further improves transparency, billing practices, and medical debt safeguards. Additionally, states can appoint a consumer protection entity—such as a state ombudsman—with the formal authority to investigate complaints, mediate disputes, and enforce compliance with consumer protection laws. Maryland provides a strong example with its Health Education and Advocacy Unit (HEAU), a division within the attorney general’s consumer protection division that aids residents with billing disputes and insurance denials while also educating them about their rights under state and federal health laws.24 In fiscal year 2024, the HEAU helped Marylanders recover or save more than $5.4 million, including more than $4.8 million through appeals and grievance cases.25
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6. Cancel medical debt
States can partner with nonprofit organizations to purchase medical debt portfolios at a fraction of their value, forgiving that medical debt entirely. For example, policymakers in Arizona, Illinois, New York, and New Jersey have each collaborated with the nonprofit organization Undue Medical Debt to eliminate debt for residents with incomes below 400 percent of the federal poverty level.26 However, while this approach provides immediate relief to individuals, it is not a comprehensive solution to the systemic issues driving medical debt. Broader reforms, such as improving insurance coverage and bolstering transparency, are necessary to prevent medical debt from accumulating in the first place.
7. Grant state attorneys general statutory notice, review, and post-transaction monitoring authority
A lack of robust competition among hospitals is associated with increased prices and decreased consumer affordability.27 In the absence of strong federal leadership, states must counteract dwindling competition by providing their attorneys general with the tools needed to oversee and regulate health care transactions effectively. For example, states could mandate that health care entities provide advance notice to the state attorney general before proceeding with mergers or acquisitions.28 Every state should join Massachusetts, Connecticut, Oregon, Rhode Island, and Washington in requiring notice of all transactions between health entities, including hospitals, provider groups, and insurers.29 In 2022, Rhode Island Attorney General Peter Neronha (D) denied a proposed merger between health systems Lifespan and Care New England on the basis that it would erode competition and raise prices “at least 9 percent over and above regular cost increases.”30
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8. Guarantee free contraceptives and develop distribution programs
States should take immediate steps to protect and expand access to sexual and reproductive health services, including abortion, contraception, and maternal health care. Safeguarding access to contraception is particularly important at this juncture.31 Some states have already expanded access to contraception, including by mandating zero cost sharing for contraceptives in all state-regulated health plans (California and Illinois), requiring insurers to cover a larger supply of contraceptives at one time (Delaware and Maine), and authorizing pharmacists to also prescribe contraceptives (North Carolina and Illinois).32 Additionally, state policymakers can expand access to contraceptives through public health initiatives such as community clinics, mobile health units, and mail-order programs to reach underserved populations and ensure equitable access to reproductive health care. For example, Michigan’s Take Control of Your Birth Control program offers free contraception resources and has distributed more than 34,000 doses of emergency contraception, 34,000 oral birth control pills, and 171,000 condoms for tens of thousands of Michiganders at more than 300 locations across the state.33
9. Increase nonprofit hospital community benefit transparency and accountability
More than half—58 percent—of all nonfederal, acute-care hospitals in the United States are nonprofit organizations.34 These hospitals are exempt from federal and state income taxes, as well as a variety of state and local taxes, and in return they are required to provide charity care and other benefits to the communities they serve.35 When nonprofit hospitals fail to meet their charity care obligations, they are functionally no different than for-profit entities. A 2022 investigation by The New York Times alleged that Providence Health & Services, an Oregon-based nonprofit hospital system, seemingly circumvented charity care requirements by pressuring low-income patients to pay up front for care and aggressively pursuing debt collection.36 Following the investigation, Providence stated that it had taken steps to address the concerns and to ensure that eligible patients receive financial assistance.37 To promote accountability and ensure nonprofit hospitals fulfill their charitable mission and address community needs, states could require nonprofit hospitals to disclose their community benefit spending to justify their tax-exempt status. States can follow Utah and Illinois by adopting legislation that sets minimum community benefit spending standards, requiring nonprofit hospitals to match or exceed their property tax liability in community investments.38 Setting minimum thresholds can prevent nonprofit hospitals from engaging in superficial or insufficient charity care or community benefit spending while benefiting from tax exemptions.
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10. Close the Medicaid coverage gap
Ten states have yet to adopt the ACA’s Medicaid expansion provision, leaving 1.5 million uninsured, low-income Americans unable to qualify for either Medicaid or for financial assistance for marketplace coverage.39 The majority of Americans in the coverage gap reside in southern states, which already have higher uninsured rates and worse health outcomes than the rest of the nation.40 A previous Center for American Progress analysis found that expanding Medicaid in these states could save 6,340 lives annually, prevent more than 44,000 evictions, and reduce medical debt by $1.8 billion.41 Furthermore, Medicaid coverage improves economic security: A 2019 Health Affairs study found that Medicaid expansion reduced poverty rates by 0.9 percentage points in 2010 and 1.4 percentage points in 2015 and 2016.42
Policymakers in these 10 states—Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming—should give expansion renewed consideration to increase access to affordable coverage for their residents. Indeed, a 2024 American Cancer Society Cancer Action Network poll found that 58 percent of GOP primary voters in Mississippi supported Medicaid expansion, and 74 percent wanted their state policymakers to reach an agreement on expansion during the 2025 legislative session.43
Conclusion
States have a crucial opportunity to protect their residents from the uncertainties of federal policy changes and to ensure affordable and accessible health care. States should act swiftly to implement targeted legislation to enhance prescription drug affordability, improve the value of insurance, establish stronger consumer protections, and promote competition in health care markets to safeguard the health and well-being of their communities.