• Subsidize behavioral health crisis services inconsistently covered by public and commercial insurers. Behavioral health crisis stabilization services, such as crisis hotlines and small specialized facilities, have been shown to lower health care spending by reducing costly emergency department and inpatient care use. These services, however, are not uniformly covered by public or commercial payers. Local leaders can improve access to more cost-effective care models and reduce patients’ out-of-pocket spending by providing targeted funding to providers to set up behavioral health crisis stabilization services.
• Subsidize family planning care and providers. Nationwide, about 18.6 million women have used family planning clinics, which offer contraceptive care and reproductive health care services. These clinics play a critical role in reducing unintended pregnancies, which can place significant financial strain on families, especially when they occur without preparation or resources. Local policymakers can help sustain access to family planning amid federal funding freezes by supporting safety-net clinics such as city and county health departments and federally qualified health centers. This support can come through direct local funding or targeted grant programs to maintain services for low-income and underserved populations. Local leaders can also strengthen access by supporting school-based health centers, which offer trusted, accessible settings for delivering family planning services to adolescents.

• Expand Medicaid in nonexpansion states. Following the implementation of the Affordable Care Act, states have the option to expand Medicaid eligibility to nonelderly people with incomes up to 138 percent of the federal poverty level. As of 2025, 10 states have not done so. Expanding Medicaid in these states would allow more than 5 million people to gain health insurance or switch to a lower-cost plan. Additionally, the costs of uncompensated care would decline, partially offsetting additional state spending on Medicaid and likely lowering insurance premiums for all state residents.
• Subsidize Affordable Care Act premiums. In March 2021, Congress enacted enhanced premium tax credits as part of the American Rescue Plan Act. In the years since, these tax credits have made health coverage more affordable for 92 percent of people with Marketplace health insurance. Further, the enhanced premium tax credits have led to higher Marketplace enrollment across all income levels, meaning the subsidies have directly reduced the premiums paid by all people and families enrolled in Marketplace coverage. If the enhanced tax credits are not extended at the federal level, states have the option to use their own funds to continue the credits or offer additional cost sharing, as 10 states do currently.
• Streamline Medicaid enrollment and reenrollment to prevent coverage losses. New federal restrictions and requirements for Medicaid eligibility under the One Big Beautiful Bill Act are projected to lead to significant coverage losses—and, in turn, loss of financial protections—for many Americans when obtaining health care. Many Medicaid-eligible adults will likely experience difficulties navigating new and complex administrative requirements to maintain their coverage. State policymakers can mitigate coverage losses by developing systems that document compliance with or exemption from work requirements (including for those with unstable employment and with health-related work barriers), and that help enrollees navigate more-frequent redeterminations and complex enrollment processes.
• Expand access to hospital financial assistance. Millions of Americans have medical debt in collections, pushing them toward financial distress and jeopardizing their future access to health care. To lessen this burden, state policymakers can require hospitals to expand eligibility for financial assistance programs, streamline these programs’ application processes, and scale back extraordinary collection actions.
• Cap out-of-pocket costs for necessary medications. High prescription drug prices have strained Americans’ wallets, with nearly 13 million adults delaying or not buying needed drugs because of their cost. More than a quarter of adults with Medicare and 5 percent of privately insured adults spent more than 1 percent of their total family income on out-of-pocket prescription drug costs. State policymakers can lower costs by capping prices of prescription drugs. For example, Colorado recently capped the price of a prescription drug used to treat rheumatoid arthritis and some autoimmune diseases.
• Subsidize family planning care and providers. Nationwide, about 6 million women have used family planning clinics, which offer contraceptive care and reproductive health care services. These clinics play a critical role in reducing unintended pregnancies, which can place significant financial strain on families, especially when they occur without preparation or resources. State policymakers can help sustain access to family planning amid federal funding freezes by investing in safety-net providers—such as federally qualified health centers and county health departments—and by expanding eligibility for family planning services through Medicaid, leveraging the 90 percent federal match for these services to reach more individuals. States can also fund family planning programs for populations ineligible for Medicaid, helping to fill gaps left by the March 2025 Title X funding freeze and other federal reductions. By doing so, states can ensure continued access for low-income and uninsured residents, especially in areas where safety-net providers rely heavily on Title X support.
• Reform licensing and certificate standards for health care workers. Shortages in the medical workforce are well-documented, with hospitals and clinics frequently understaffed while some areas—particularly rural communities—lack access to health care facilities altogether. These concerns are compounded by recent federal cuts that will adversely affect rural hospitals’ revenue and uncompensated care costs and reduce options for financing medical education. State policymakers can bolster the physician pipeline and help increase staff at current and new facilities by making it easier for immigrant physicians who received credentials abroad to get licensed in the state. In addition, state licensing laws that support nurse practitioners and nurse midwives working at the top of their license can increase access to care and improve affordability by expanding the availability of lower-cost providers. For example, research shows that women with Medicaid coverage who receive midwifery care at birth centers have better birth outcomes at lower cost.
• Lower the cost of behavioral health care. Behavioral health specialists, such as psychiatrists and psychotherapists, are less likely to accept insurance than medical and surgical providers, which can increase costs for those seeking access to mental health care and substance abuse treatment. In addition, research shows patients with insurance coverage are more likely to need to go out of network for behavioral health services compared with medical and surgical services, which can make behavioral health care more expensive for patients. By strengthening state network adequacy standards, better enforcing state parity laws, and improving oversight of Mental Health Parity, Addiction, and Equity Act compliance, states can encourage insurers to reduce administrative and reimbursement-related barriers that prevent behavioral health providers from participating in insurance arrangements and to improve coverage of behavioral health services.
• Address provider consolidation through state antitrust enforcement. Since 2010, hospitals have merged at an unprecedented rate, leading to highly concentrated health markets devoid of competition. As a result, payment rates have risen at alarming speed, leading to higher insurance premiums for everyday people. To bring down health care prices, state policymakers can pursue policies that regulate and introduce competition in the hospital market by, for example, scrutinizing private equity investment, employing conduct remedies to ensure care for the underserved, and developing an all-payer claims database to allow for price comparison.
• Reduce prices for health care services. High health care prices have driven up health care spending in the United States compared with other industrialized countries. State policymakers can lower prices by expanding provider supply, limiting provider consolidation, and reducing administrative complexity. More direct approaches that could lower health care spending include introducing a state-level public option into insurance markets and imposing a cap on provider payment rates.

• Reform Medicare coverage to include price caps and additional benefits. Currently, Medicare provides health insurance for roughly 69 million Americans, covering about 82 percent of beneficiary expenses. Reforming the program to cover additional benefits like vision or dental can create significant savings for enrollees. Further, reducing out-of-pocket costs by applying a cap to beneficiary premiums and cost-sharing can reduce enrollees expenses, although it would require additional government spending.
• Revise the Medicare physician fee schedule. Federal policymakers are currently considering changes to the Medicare physician fee schedule to combat long-standing overvaluation of fees for procedures, which can lead to overprovision of unnecessary or low-value care, incentivize medical students to enter high-paying specialties instead of primary care, and shortchange primary care payment. To effectively revise these fees and ensure the fee schedule is efficient and effective, we recommend using empirical data to set fees rather than physician surveys and implementing a technical expert panel to help CMS reform the fee schedule.
• Cap out-of-pocket costs for necessary medications. High prescription drug prices have strained Americans wallets, with nearly 13 million adults delaying or not buying needed drugs because of their cost. In fact, more than a quarter of adults with Medicare and 5 percent of privately insured adults spent more than 1 percent of their total family income on out-of-pocket prescription drug costs. There are many approaches federal policymakers can take to address the high prices of necessary medications, including accelerating and expanding drug price negotiations, which could save taxpayers billions of dollars.
• Address provider consolidation through antitrust enforcement. Since 2010, hospitals have merged at an unprecedented rate, leading to highly concentrated health markets devoid of competition. As a result, payment rates have risen at alarming speed, leading to higher insurance premiums for everyday people. To bring down health care prices, federal policymakers can pursue policies that regulate and introduce competition in the hospital market through policies such as stricter scrutiny of private equity investment, enforcement of antitrust standards, and price ceilings on payment rates.
• Implement price regulation on insurer rates. Even if federal policymakers can encourage greater competition among hospitals and across insurers, rising prices in the commercial health insurance industry will still drive higher costs. Price growth limits could help bring down overall health care costs across all insurers, but federal policymakers will need to carefully consider tradeoffs in implementation.
• Extend the enhanced premium tax credits for Marketplace coverage under the Affordable Care Act. If enhanced premium tax credits are not extended, people enrolled in the Marketplace will face large increases in health insurance premiums, and 4.8 million will become uninsured.
• Repeal the strict eligibility provisions on Medicaid and Marketplace. Recently enacted restrictions on Medicaid and Marketplace eligibility through the One Big Beautiful Bill Act will lead to higher health care costs for people who switch to employer-sponsored insurance or have to pay full price for nongroup insurance, and will increase financial insecurity for people who become uninsured after losing eligibility. Federal policymakers can protect families by restoring eligibility for Marketplace premium tax credits and Medicaid to lawfully present immigrants, eliminating administrative barriers to enrollment in the Marketplaces, allowing for automatic reenrollment and provisional eligibility, and eliminating new eligibility requirements for Medicaid expansion enrollees.
• Reform the Affordable Care Act to achieve universal coverage. Recent cuts to health care programs risk leaving an additional 15 million US residents uninsured by 2034 and subject to exorbitant health care costs. Relative to current law in 2025, one study found that to save households roughly $52.1 billion in health care costs, federal policymakers could institute a suite of incremental reforms, including enhanced cost-sharing subsidies, extended Marketplace eligibility, automatic enrollment, and capped provider payment rates. Alternatively, federal policymakers could institute a public option plan, which an analysis of one proposal found could save households $20.3 billion and the government $20.8 billion.

Note: If enhanced premium tax credits for Marketplace coverage are not extended, 4.8 million (not 8 million) will become uninsured (corrected 10/31/25).