Federal and state policy developments continue to shape healthcare affordability, coverage and health plan operations. This update highlights the key issues we are monitoring and what they could mean for customers, brokers, employers and members.
Federal Update
Midterm Elections and Year-End Outlook
As Washington enters the 2026 midterm cycle, control of the House is expected to hinge on a handful of competitive races, with redistricting efforts adding further uncertainty. Congress has funded the federal government through December 11, setting up a year-end legislative package that could become the primary vehicle for healthcare and tax policy proposals. At the same time, the 2026 midterm elections, including several competitive New York House races, are expected to shape the healthcare policy agenda heading into 2027. Healthcare affordability remains a key focus for lawmakers, with potential future discussions including coverage expansion and broader healthcare reforms. Looking ahead to the 2027 Congress, a potential Democratic majority could elevate discussions around healthcare affordability, coverage expansion, Medicare for all proposals, and other progressive healthcare priorities.
Federal Transparency Proposals
H.R. 9393 (Lower Costs, More Transparency Act), H.R. 9645 (Health Care Price Certainty for All Americans Act), and S. 2355 (Patients Deserve Price Tags Act) would expand healthcare price transparency requirements by strengthening hospital reporting rules, extending transparency mandates to additional provider types, and increasing health plan requirements for machine-readable files, cost estimator tools, reporting, and executive attestations. All three bills have advanced out of committee and are eligible for full chamber consideration.
Why This Matters: Expanded transparency requirements could increase health plan administrative and compliance costs, which may ultimately affect premiums and plan operations. Self-funded employers should also monitor potential new reporting obligations and changes to transparency tools used by members when comparing healthcare costs.
Through this all, we do remain committed to price transparency. It’s why we have our Estimate Medical Costs Tool available on our website.
No Surprises Act: Independent Dispute Resolution
A key federal policy priority for health plans remains reform of the Independent Dispute Resolution (IDR) process established under the No Surprises Act. While the law has successfully reduced surprise medical billing for many consumers, the arbitration process creates significant challenges. Health plans continue to advocate for improvements to the No Surprises Act arbitration process, citing administrative inefficiencies, inconsistent determinations, and a high volume of ineligible claims entering the system
Why This Matters: The outcome of IDR reform efforts could directly influence healthcare affordability. A more predictable and efficient dispute resolution process may help moderate provider reimbursement disputes and reduce cost pressures that can ultimately flow through to employer-sponsored coverage.
Medicaid Program: Changes to Provider Taxes
The proposed rule – Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes would put new limits on certain provider tax arrangements that states use to help finance Medicaid. Many states rely on provider taxes as part of their Medicaid funding strategy and to access federal matching funds.
Why This Matters: These changes could make it more difficult for some states to finance Medicaid programs using existing funding mechanisms. States may need to identify alternative funding sources, modify Medicaid financing arrangements, or adjust program spending, which could have downstream implications for providers, state budgets, and healthcare affordability.
New York Update
Political Environment
Election activity is accelerating across New York, with closely watched primaries highlighting growing ideological divisions within both major parties.
Within the Democratic Party, progressive organizations, including the Democratic Socialists of America (DSA), continue to expand their influence, particularly among younger voters. Several DSA-backed candidates were successful in primary elections across our service area. Their success could contribute to continued legislative attention on healthcare affordability, insurance market oversight, Medicaid policy, and proposals for expanded government-sponsored coverage options.
New York Legislative Session
The 2026 New York State Legislative Session concluded on June 12. More than 20 healthcare-related bills affecting our health plan passed both houses and now await action by the Governor. In the coming months, the Governor will determine whether to sign, veto, or seek amendments to these measures.
Essential Plan Redetermination
Following federal funding changes, approximately 450,000 individuals lost eligibility for the expanded Essential Plan. Many have transitioned to Medicaid, other Essential Plan coverage, or Qualified Health Plans through New York State of Health. As of August 30, 2026, approximately 256,000 individuals (59%) had selected alternative coverage through New York State of Health, including nearly 197,000 who transitioned to Medicaid or remained eligible for Essential Plan coverage.
Among members enrolled in our health plans, approximately 42% of impacted individuals retained coverage through an affiliated product or program, including Essential Plan, Qualified Health Plans (QHPs), Medicaid Managed Care, commercial group, and Medicare products.
Why This Matters: Coverage shifts among lower-income populations can affect enrollment trends, risk pools, and market dynamics across New York's individual and public coverage programs.
MCO Tax Structure
Beginning in 2027, New York plans to change how it calculates a tax on Medicaid managed care health plans. Instead of a flat fee based on the number of members enrolled, the tax would equal 0.35% of premium revenue. The change must still be approved by the Centers for Medicare and Medicaid Services (CMS).
Why This Matters: If approved, the new tax calculation could affect health plan costs and, in turn, influence premium rates. The impact may vary among employers depending on the type of coverage they offer and how their plan is funded.
What we are reading:
- CMS Targets Unauthorized Marketplace Enrollments and Broker Misconduct | Groom Law Group
- Analysis: Prices for Many Brand-Name TrumpRx Drugs Are Cheaper than the Average Price in Other Wealthy Countries, But Are Almost as Likely To Be More Expensive | KFF
