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March 26, 2025
Fact Sheet
Mary Louise Gilburg
Sofia Espinosa
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Mar 27, 2025
Mar 12, 2025
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The Milbank State Leadership Network hosted experts from the National Conference of State Legislatures (NCSL) to discuss state legislative approaches to Medicaid and behavioral health policy during the 2025 state legislative season. The conversation explored bipartisan approaches to strengthen coverage, address rising costs amid severe budget constraints, and, improve access to substance use disorder treatment and suicide prevention.
Panelists
Kathryn Costanza, JD, Health Program Principal, National Conference of State Legislatures
In 2024, state legislative sessions led to expansions in Medicaid eligibility and benefits, parity for behavioral health, and a rise in rates for home- and community-based services, behavioral health providers, and dental care providers. Some legislatures also focused on coverage for justice-involved individuals upon reentry into the community and coverage of non-medical drivers of health. In 2025, discussions on reentry and non-medical drivers of health have continued, but the overall context for Medicaid policy has shifted dramatically. In addition to funding uncertainty at the federal level, states are facing economic pressure from health care rate increases and higher spending due to benefit and eligibility expansions. Most states have decreased enrollment since Medicaid unwinding began in March 2023, yet the cost per capita for those remaining in the program continues to rise.
Many states have pursued Section 1115 waivers as opportunities for innovation in state Medicaid agencies. Recent waivers focus on multi-year continuous coverage for children under the age of six, addressing non-medical drivers of health such as housing and food insecurity, and reentry programs for justice-involved individuals. Reentry waivers can be used to provide benefits to incarcerated adults and youths up to 90 days prerelease. So far,
States that have pursued these waivers have often sought synergies between them, particularly to address the non-medical drivers of health for people recently released from incarceration. (On March 4, a CMS bulletin rescinded prior guidance on health-related social need and current waivers are under review).
Medicaid and the Children’s Health Insurance Program (CHIP) coverage for immigrants is complex. For example, states can receive federal funding to cover pregnant women regardless of immigrant status, and “lawfully residing” pregnant women and children who are otherwise subject to a 5 year wait. Independent of federal funding, states can self-fund health coverage for children, adults and older adults, regardless of immigration status. Likewise, states have significant flexibility in which conditions, locations of care, and eligibility rules they allow in the administration of Emergency Medicaid, which can cover specific instances of care.
States also have significant discretion in how they administer disproportionate share hospital (DSH) payments and uncompensated care pools, which are supplemental payments made to hospitals to offset costs of care patient care for uninsured patients or those covered by Medicaid. Unlike to state-funded coverage, these payments cover emergency care and inpatient services but do not include primary or preventive care services. They are also not insurance and do not reduce billing or costs to patients.
Example: In 2023, the Utah state legislature passed SB 217 to extend coverage to children who don’t meet traditional eligibility criteria under the state’s CHIP program. To ensure sustainability, the Utah legislature included a sunset provision and data review, permitted the Utah Department of Health and Human Services to create a waiting list, and capped spending at $4.5 million.
Charlie Severance-Medaris, MPH, Health Program Project Manager, National Conference of State Legislatures
Presenters also highlighted key issues and legislative trends related to substance misuse and overdose, suicide prevention, and mental health treatment.
In 2023 and 2024, the number of drug overdose deaths in the United States decreased for the first time in over 20 years due to recent law enforcement efforts to intercept fentanyl and other drugs before they enter communities and state innovations, as well as public health and mental health prevention and treatment strategies. State-level evidence-based strategies for preventing opioid overdose include misuse prevention, overdose prevention, harm reduction, and access to treatment.
States are also working to transparently allocate opioid settlement funds to ensure they are used effectively for opioid misuse prevention and treatment.
Suicide is one of the leading causes of death in the United States. Following the Covid-19 pandemic, suicide rates have risen, and adolescent mental health has declined. Many state legislatures are introducing and enacting bills related to:
Montana and North Dakota passed legislation to improve data collection by creating suicide fatality review committees to analyze deaths by suicide and make recommendations.
Karmen Hanson, MA, Health Program Senior Fellow, National Conference of State Legislatures
Many states have enacted behavioral health parity laws that expand federal laws requiring insurance coverage for mental health and substance use disorder treatment to be comparable to coverage for physical health conditions.
State Opioid Treatment Programs (OTPs) that provide medication-assisted treatment for opioid use disorders are certified and partially funded by the Substance Abuse and Mental Health Services Administration (SAMHSA) and overseen and funded by the state’s opioid treatment authority. Additional treatment access points include mobile mediation units that operate under OTPs and emergency departments.
For more resources on state legislative approaches to Medicaid and behavioral health policy and general health legislation databases, please see the list of following resources.
2024 Medicaid State Legislative Trends: State Legislatures Address Medicaid Coverage and Payments in the 2024 Legislative Session
1115 Waivers:
Medicaid Policy for Immigrants:
NCSL Health-Related Legislation Databases:
