United States of Care’s 2026 Legislative Wrap Up Report

About United States of Care

United States of Care (USofCare) is a listening-first, nonpartisan health care advocacy organization that brings people’s experiences to the policy decisions that shape our health care system to ensure that everyone has access to quality, affordable health care, regardless of who they are, where they live, or how much money they make. Too often, decisions about our health care system are shaped by industry stakeholders and partisan priorities rather than the experiences of the people who rely on it every day. USofCare was founded to fix that – and to enact durable, people-centered policy solutions at the state and federal levels. We’re putting people — not partisan politics or special interests — at the center of health policy.

We do this by listening to more than 30,000 people across all 50 states. Through in-depth interviews and community conversations with individuals and small groups, focus groups and listening sessions, and national public opinion polling, we learn about how people think about health care and where they see the greatest challenges. We pay close attention to how people talk about their experiences, and use language that resonates with them.

Using this listening work, USofCare advocates for policy reforms at the state and federal levels. Translating insights from our listening work into meaningful reforms for legislative and regulatory uptake is central to our advocacy efforts. As such, our experience and success advancing these policy solutions in states can influence the kinds of reforms that Congress and the administration may ultimately take up legislatively and regulatorily.

States Took Action to Lower Higher Health Care Prices Charged by Hospitals

State Trend #1

Far too often, rising health care costs have forced people to choose between medical care and other necessities like food and childcare – and have even led some people to skip care entirely. The top driver of these increased health care costs continues to be high prices charged by hospitals, which grew at a faster rate in 2024 than any year since 2007. These high prices are the result of a system that incentivizes consolidation, allowing these large systems to take advantage of their increased market power and demand higher and higher prices. As a result, hospitals charge private plans an average of over 2.5 times what they charge Medicare – and these high prices are passed along to people in the form of higher premiums and out-of-pocket costs.

Given these high, and largely unchecked prices, it’s understandable that hospital spending accounts for approximately 40% of every premium dollar, far outstripping spending in other spending categories like physician services or prescription drugs. These high prices contribute to higher forms of cost-sharing that adversely affects everyone with insurance, whether they need care in the hospital or not. 

United States of Care, in partnership with the Brown University Center for Advancing Health Policy through Research (CAHPR), modeled the impact of three hospital pricing policies – facility fee bans, site neutrality, and hospital payment caps (or reference-based pricing) – in three states. The report found that these policies could save people billions of dollars in out-of-pocket costs in those three states alone with minimal impact on hospital operating margins.

To make people’s health care more affordable, states across the country have introduced and passed policies to rein in price growth, improve transparency, and lower costs for people across care settings. Taken together, solutions reference-based pricing, limits on facility fees, and site neutrality signal a growing appetite by policymakers to directly address hospital pricing practices to improve affordability for consumers, employers and employees, and state budgets alike.

Following her appointment to Oregon’s Committee on Health Care Affordability, USofCare Senior State Advocacy Manager Kelsey Wulfkuhle has worked with other committee members to propose policies, such as hospital commercial reference-based pricing,  that address the primary drivers of health care costs.

Advancing Reference-Based Pricing

As high prices charged by hospitals continue to increase, one strategy states are pursuing to address high hospital costs is through reference-based pricing, which establishes a “reference price” – often tied to a percentage of Medicare rates – to limit, or cap, on what hospitals can charge for certain services. Doing so “right-sizes” the cost of these services and brings them more in line with the actual cost to provide them, which can lead to significantly lower health care costs for state governments and people alike while still ensuring hospitals’ financial stability. States have the flexibility to design these policies to fit their individual needs by identifying which markets or programs – such as the state employee health plan or entire commercial market – are included and which health care services should be subject to the cap. In addition, states can also structure their reference-based pricing program to improve access to high-quality services, such as primary care or behavioral health, by creating payment floors for specific services or types of providers. Altogether, any savings derived from this policy could be reinvested into affordability or coverage programs that further benefit people or alleviate budget shortfalls. 

USofCare’s testimony in support of Maine legislation to cap some hospital prices identified how the bill would  deliver “immediate and long-term premium and out-of-pocket savings to people and employers.”

In addition to the 13 states that already have some form of this policy, eight states introduced legislation in 2026 to establish or expand reference-based pricing within their state employee health plan (SEHP), commercial market, or other segment of their insurance market. New Mexico’s law expands the state’s successful reference-based pricing policy beyond the state’s SEHP to public school employee plans and is expected to lead to approximately $16 million in savings in FY2027 alone. Legislators in Maine also introduced a reference-based pricing bill that – although later amended – would’ve capped payments for inpatient and outpatient services at 200% of the Medicare rate.

Establishing Limits on Facility Fees

Loopholes in billing practices allow hospitals to charge more for services delivered in certain hospital-based settings, such as hospital outpatient departments (HOPDs), compared to the same services delivered at an independent physician’s office, despite no change in care delivery. This leads to further consolidation as hospitals continue to purchase independent clinics and convert them into HOPDs. In addition to allowing hospitals to charge higher baseline prices for services delivered in these facilities, hospitals are also able to charge patients so-called “facility fees” in outpatient or telehealth settings. These fees, which are usually reserved for care delivered in hospital settings, may double or triple the price of care. 

Twelve states introduced legislation to address facility fees in 2026, building upon existing momentum in states across the country that have already taken action to protect people from facility fees. New Mexico once again led the way in passing legislation that would prohibit hospitals from charging facility fees for outpatient care, including preventive care and telehealth services. Michigan, North Carolina, and West Virginia also introduced bills that would prohibit facility fees for outpatient care. Several of these states, including North Carolina and West Virginia, also chose to include other consumer protections in their legislation, including provisions to increase facility fee transparency, promote billing reforms, or establish facility fee reporting and data collection.

Advancing Site-Neutral Payment Policy

State policymakers looking at a more comprehensive approach are increasingly looking to state-level site-neutral policy as a way to secure significant savings for the health care system, employers, and people. Building off of similar reforms first established under Medicare, state-level site neutrality typically applies to a state’s commercial market and requires these insurers to pay the same price for the same service regardless of where care is delivered for certain routine, low-complexity services. Ensuring “same service, same price” regardless of care setting would remove some of the financial incentives that drive hospitals toward further consolidation and lower costs for people broadly. 

USofCare’s memo in support of New York’s Fair Pricing Act (S705/A2140) highlighted real-world examples of how certain routine, low-complexity services cost significantly more in hospital outpatient settings compared to a doctor’s office.

States have shown increased interest in expanding site-neutral policy beyond Medicare over the past year. New York’s Fair Pricing Act would cap prices in the commercial market for a list of common outpatient procedures at 150% of what Medicare pays and save people more than $213 million in out-of-pocket costs. Site-neutral legislation was also introduced in Illinois for both the commercial market and State Employee Health Plan and in the commercial market in Pennsylvania in 2026; if passed and implemented, both proposals would also result in significant consumer savings. Virginia’s law, while narrow in scope, calls on using data from the state’s all-payer claims database to analyze potential cost containment measures, including site-neutral payment policy.

Expanding Hospital Price Transparency Requirements

As health care costs continue to rise, people and policymakers often struggle to understand what hospitals charge for the care they provide. Greater hospital price transparency can give people, employers, and policymakers a better understanding of these prices and can be used as a tool to improve affordability, accountability, and competition across the health care system. Unfortunately, despite federal requirements that went into effect in 2021, only one-in-five hospitals are compliant with these price transparency rules, which require hospitals to disclose the prices of all services – including negotiated rates – and post a separate, consumer-friendly list of prices for 300 “shoppable” services on their websites. To supplement federal regulations, state policymakers are increasingly focused on transparency efforts that hold hospitals accountable, strengthen enforcement mechanisms, make pricing information more accessible and usable for people, and give employers and policymakers better insight into health care spending trends. 

During the 2026 legislative session, 21 states, including North Carolina and Pennsylvania, introduced legislation to build upon the federal rules to strengthen enforcement of transparency requirements, expand these protections to additional provider types, and protect against any rollbacks on the federal level. Legislation signed into law in Wyoming codifies the federal transparency requirements and establishes state-level enforcement and penalties for hospital noncompliance, including sanctions on hospitals’ state licenses. Hawaii’s new law prohibits hospitals from engaging in debt collection practices if they are noncompliant with federal price transparency rules.

Expanding Consumer Medical Debt Protections

Rising health care costs thanks to high prices charged by hospitals have caused nearly four-in-ten Americans to take on some form of medical debt, which disproportionately affects communities of color and those without insurance. This debt can often exceed $2,000,  damaging credit scores, limiting people’s ability to secure housing or loans, and discouraging people from seeking needed care. State efforts to reduce the financial burden of medical debt include restricting the reporting of medical debt to credit agencies, strengthening hospital financial assistance policies, and improving reporting transparency. Taken together, these policies can help protect people from aggressive debt collection practices and provide them with options when faced with medical debt.

Thirty states introduced legislation in 2026 to protect people from medical debt. State approaches varied, but many, including Louisiana, considered bills to place limits on certain extraordinary collections practices, such as wage garnishment or excessive interest rates.Other states, including Alaska and Michigan, introduced legislation restricting medical debt from appearing on people’s credit reports. Indiana also passed legislation requiring hospitals to notify people of any potential financial assistance they may be eligible for before initiating any collections proceedings.

States Pursued Legislation to Improve People’s Access to Health Care

State Trend #3

While affordability challenges continue to dominate people’s health care concerns, it’s important that people’s health insurance covers services they say they need and want without unnecessary access burdens. States have protected people’s access to needed services and treatments by placing limits on prior authorization, preserving access to primary care, and ensuring continued access to no-cost preventive care. Taken together, these policy solutions move the health care system closer toward a patient-first care model that incentivizes and promotes high-quality, low-cost care to benefit both people and the system broadly. 

Increasing Investment in Primary Care

A health care system grounded in primary care allows for the personalized, patient-focused relationships that people want with their providers. Investing in these relationships increases access to needed preventive care and is associated with improved health outcomes, including improved life expectancy and fewer hospitalizations, while also lowering costs. Unfortunately, historic underinvestment in primary care and undervaluation of these services more broadly compared to more lucrative specialty care have further restricted people’s access to needed primary care. This has threatened the financial viability of many primary care practices, including independent clinics, contributing to practice closures, corporate acquisitions, and further consolidation across the health care system. As more primary care practices are absorbed by larger health systems and corporate entities, people face higher costs and fewer care options. Solutions to expand primary care access, such as primary care investment targets or primary care provider payment floors, can help counter decades of primary care underinvestment and support a more sustainable primary care system.

A May 2026 report released from USofCare and the National Partnership for Women & Families drew on previous USofCare research that found that people want affordable, accessible, and convenient primary care. Unfortunately, chronic underinvestment in primary care threatens people’s access and leads to increased costs.

Building on previous efforts in more than 20 states to address primary care spending, nine states considered legislation in 2026 to bolster primary care investment and access. Delaware and New York introduced legislation to require health insurers to spend at least 11.5% and 12.5% of their total medical costs on primary care, respectively. Oklahoma’s more targeted law requires managed care companies participating in the state’s Medicaid program to spend at least 11% of their total medical costs on primary care. Most notably, Vermont’s comprehensive primary care legislation, expected to be signed into law by the Governor, lays the groundwork for system transformation by creating primary care spending targets, changing how primary care providers are paid, and investing in primary care workforce development.

Restricting the Use of Harmful Prior Authorization

Prior authorization often delays people’s timely access to needed care by requiring providers to obtain insurer approval before covering certain medications, procedures, or services in order to control health care costs. Despite recent steps by insurers to limit its use for certain services given widespread coverage denials, prior authorization remains ubiquitous and has resulted in significant harm and widespread administrative burden for both people and providers. In response, states have increasingly pursued legislative solutions to limit the type of services subject to prior authorization, lengthen prior authorization approvals, or ease prior authorization requirements for certain types of providers that meet certain criteria. For example, several states have implemented “gold card” legislation that allows certain providers with high prior authorization approval rates to bypass these processes. . 

Beyond prior authorization laws already in effect, 19 states introduced legislation to further reform this process in 2026. Virginia’s law extends the length of an initial prior authorization to six months and at least a year for continuing approvals. Kentucky passed “gold card” legislation while also establishing additional reporting and transparency requirements. Iowa’s new law bans insurers from requiring prior authorization for certain cancer screenings and emergency care, easing the burden on people in need of more urgent care. Alabama and Washington both passed legislation that requires insurers to have a licensed physician or other qualified clinician – and not AI –  sign off on any prior authorization that would deny, delay, or modify people’s access to services.

Protecting People’s Access to No-Cost Preventive Care

The Affordable Care Act’s preventive services mandate requires most private health insurance plans to cover dozens of preventive care services at no cost. While the mandate has been effective in expanding access to needed preventive care, lowering people’s out-of-pocket spending, and improving health outcomes, gaps in implementation remain.  Last year’s Supreme Court decision in Kennedy v. Braidwood introduced significant uncertainty about the authority of federal bodies that determine no cost-sharing coverage rules. Recent actions taken by the Department of Health & Human Services, especially with regard to vaccines, have cast further doubt on whether states can rely on federal recommendations to ensure continued no-cost access to these services. Furthermore, people continue to be incorrectly billed for preventive care that should be covered for free, often due to coding errors or confusion about coverage requirements. 

In response to this federal uncertainty, 18 states introduced legislation this year to protect people’s access to no-cost preventive care. Many of these bills, including legislation passed in Maryland and Vermont, established new state bodies or empowered existing state agencies to  recommend preventive services to be covered with no-cost, instead of relying on federal recommendations. States have also begun to band together to issue joint preventive services recommendations to fill the gap left by the federal government, including those made by the Northeast Public Health Collaborative and West Coast Health Alliance.

Looking Ahead to 2027

While the looming 2026 elections and fallout from H.R. 1 may cause some uncertainty ahead of next year’s legislative sessions, health care affordability concerns will likely drive many voters’ decisionmaking. Similar to 2026, many states will be working to increase revenue or cut spending to fill deep budget shortfalls, including legislatures in Montana, Nevada, North Dakota, and Texas, which will convene in 2027 after meeting only every other year. Many hope to avoid deep cuts to services that people rely on.

While the results of elections to select state governors, legislators, and other key policymakers will influence policy agendas in 2027 , we expect many lawmakers to continue to work together to champion solutions to lower the cost of care broadly, with a continued focus on hospitals as key drivers of these cost increases. In doing so, these legislators will likely be influenced by some of the following dynamics:

Continuing Federal Uncertainty

Despite progress in the states to address high health care costs, Congress has failed to pass notable legislation to address these costs. The only major bill passed last year – H.R. 1 – will continue to have an outsized impact on state budgets and state Medicaid programs as states scramble to contain the fallout and monitor the impacts on state budgets and people’s access to care. In addition to the law’s Medicaid cuts, questions remain about the federal government’s ability to get RHTP dollars out the door in time for states and subgrantees to use them. Significant uncertainty also exists surrounding H.R. 1’s Medicaid work requirements, given the short, six-month implementation timeline and an overly restrictive exemptions policy that will only lead to more coverage losses for people.

Growing Support for Action to Lower Prices on Both Sides of the Aisle

There is growing bipartisan interest in health care affordability concerns as policies to lower the cost of care are championed by conservative and progressive lawmakers alike.  Conservative lawmakers, for example, have framed reference-based pricing reforms as market-oriented solutions that allow for more competition in an increasingly consolidated health care market. Progressive lawmakers are comfortable talking about how the same policy prioritizes consumer protections and makes health care more affordable for all. Together, legislators on both sides of the aisle are increasingly teaming up to promote cost containment and transparency solutions to improve care affordability for people and their families.

USofCare’s innovative Red State Cohort is designed to respond to the unique challenges and opportunities present in conservative-leaning states. USofCare is partnering with advocacy organizations in six states to facilitate cross-state collaboration, provide technical assistance, and lend policy and communications support to help these states push policies to lower the cost of care.

Increasing presence of artificial intelligence in health care

States will have to confront the challenges and opportunities provided by artificial intelligence (AI) in health care. While AI remains a promising tool to alleviate administrative burden, reduce provider burnout, and improve people’s affordability, sufficient guardrails are needed to ensure AI technology – such as utilization management algorithms, provider reimbursement methodologies, and patient-facing tools – doesn’t create new barriers to care or engage in discriminatory behavior. States policymakers and advocates will also likely increasingly utilize  AI to inform decision- and policymaking and how they design, regulate, and enforce new policies. As a result, states will need to invest in transparent standards and oversight to ensure AI across systems is safe, equitable, and accountable.

Growing Public Support for Greater Government Involvement in Health Care

While government has largely taken a hands-off approach when it comes to health care pricing and regulation historically, people are increasingly open and supportive of policymakers playing a larger role in making health care more affordable. More than half of all people don’t trust health care companies to regulate these costs on their own, and huge majorities of people support policymakers pursuing policies like greater price transparency, prohibiting facility fees in certain settings, and setting limits on hospital prices to lower costs. This support exists regardless of party affiliation and could be used as an effective counterpunch to hospital and other industry stakeholder opposition to these policies.