Hoover Institution (Stanford, CA)—The Hoover Institution’s Healthcare Policy Working Group convened a roundtable in Washington, DC on January 23, bringing together experts from across the healthcare policy landscape to discuss recent changes to Medicaid and the path forward for the important state-federal program.
The discussions were led by David and Diane Steffy Fellow in American Public Policy Studies Lanhee J. Chen, and Policy Fellows Tom Church and Daniel L. Heil.
Attendees included current policymakers from the Trump administration, Congress, and states, as well as policy experts from a variety of academic institutions, think tanks, and advocacy groups.
The discussion focused on the implementation challenges arising from the Medicaid provisions in H.R. 1, also known as the One Big Beautiful Bill, alongside specific state-based innovations necessary to improve the program, as well as federal reforms to improve the fiscal outlook for Medicaid.
The first session examined how states are implementing new federal requirements to Medicaid under H.R. 1. Participants discussed the significant technology and data infrastructure challenges states face, with many Medicaid eligibility systems still relying on outdated processes.
There was interest in integrating Medicaid eligibility systems with those used for related programs including the Supplemental Nutrition Assistance Program (SNAP), and sharing workforce, education, and health information data to automate verification and reduce administrative burden for both states and beneficiaries. Multiple participants noted that while H.R.1’s eighteen-month implementation timeline is aggressive, states that invest in modern data systems now will be better positioned for long-term success.
The second session turned to state innovation and strategies to control Medicaid’s rising costs. Discussion centered on how states can move beyond traditional Medicaid toward a value-based approach that rewards efficiency and outcomes rather than volume of services performed.
Participants explored ideas including bundled payments for common procedures, expanded use of direct primary care, and multipayer models that align incentives across Medicare, Medicaid, and commercial insurance coverage. There was significant interest in how the new Rural Health Transformation Fund could be used not just to stabilize rural hospitals but to catalyze delivery system reform. Participants also identified state procurement processes—which can take years to complete—as a major barrier to innovation.
The third session addressed federal policy reforms and program integrity. Participants discussed proposals to streamline coverage across Medicaid and the individual private insurance market, reduce administrative complexity for beneficiaries who move between programs, and address the financing incentives that have led to significant growth in provider taxes and intergovernmental transfers.
There was substantial discussion of the new budget neutrality certification requirements for Section 1115 waivers, which change how states can test pilot or experimental policies to better achieve Medicaid’s health objectives. Participants said they expected the new changes to Section 1115 will have significant implications for how states approach Medicaid demonstrations going forward.
The roundtable concluded with recognition that Medicaid is at an inflection point. States face immediate implementation deadlines and budget pressures but also have an opportunity to use this moment to modernize and improve how they serve beneficiaries. Participants emphasized the value of continued dialogue between states, the federal government, and the policy community to ensure that reform efforts achieve their intended goals of fiscal sustainability, program integrity, and access to care for vulnerable populations.
##
Learn more about the Healthcare Policy Working Group here.
