This year, many state legislatures are operating in short or fiscal-only sessions, and more than thirty-five have gubernatorial elections on the horizon. With less bandwidth for complex health policy overhauls, major reforms related to 340B, Medicaid eligibility, and pharmacy benefit managers (PBMs) are advancing more selectively than in 2025 when activity peaked. Here is a closer look at where these issues stand in early 2026.
340B Reform: Transparency Momentum Continues
The 340B Program remains a focal point in state policy debates. While there are fewer bills this year, the prevailing themes remain stable:
- Enhanced transparency requirements on 340B covered entities
- Limits on drug manufacturers, insurers, and PBMs interacting and contracting with 340B covered entities
Medicaid Eligibility: Implementation Challenges and Political Divides
Changes enacted under the OBBBA are now shifting to implementation. The most significant changes apply to the Medicaid expansion population in states that opted to expand:
- States must redetermine this population’s eligibility every six months beginning with renewals on or after December 31, 2026
- Work and community engagement requirements must be fully implemented by January 1, 2027 (a one-year grace period exists, though federal approval flexibility is widely viewed as unlikely).
Many states have started adopting federal requirements into state law, though their approaches vary. Some states are authorizing Medicaid agencies to implement federal law as written, while others want to increase required work hours. Still, other states are introducing legislation that would prohibit adopting stricter standards than what is outlined in federal law .
Medicaid “Fair Share” Policies
Another issue gaining traction is the concept of Medicaid “Fair Share” policies. These proposals would look at whether large employers are relying on Medicaid to cover low-wage workers’ healthcare costs rather than providing affordable employer-sponsored insurance. In theory, employers whose workers disproportionately rely on Medicaid could face financial penalties. However, unintended consequences abound:
- Some states operate Medicaid buy-in programs for workers with disabilities that intentionally remove income caps. Penalizing employers in those scenarios could conflict with program design.
- For individuals with chronic diseases, Medicaid benefits may be more comprehensive than employer-sponsored plans.
- Employees may decline employer coverage for reasons unrelated to wages, including network adequacy, cost-sharing, or disease-specific coverage needs.
- Work requirements could disproportionately affect part-time workers, potentially discouraging flexible employment arrangements.
PBM Reform: Persistent Pressure, Limited Movement
Pharmacy benefit manager reform remains one of the most consistently introduced health policy topics nationwide, with bills having been introduced in approximately 25 states. Common themes include:
- Transparency and Reporting requirements about ownership structures, financial arrangements, rebate and spread pricing practices, and operational details.
- Rebate Pass-Through Mandates requiring PBMs to pass between 80 to 100% of rebates directly to health plans or to consumers
- “Delinking” Compensation Models prohibiting PBMs from tying compensation to a drug’s list price, which can often mitigate a PBM’s use of spread pricing. Instead, PBMs would operate under flat administrative fees.
What This Means for Patient Advocates and People with Chronic Diseases
- Medicaid redeterminations and work requirements could significantly affect coverage stability.
- Fair Share proposals and work requirements intersect with disability programs, part-time employment, and chronic disease management in complex ways and may result in unintended consequences.
- Bills introduced but not passed this year may resurface with greater force next session.
While 2026 may not deliver sweeping state reforms, it is shaping the administrative and political groundwork for more consequential changes ahead.