Though some states will see shorter legislative sessions, 2026 will be an active year for bills related to health care affordability. In addition to focusing on lowering health care costs for consumers, a number of states will need to identify savings and seek efficiencies in their Medicaid programs, state employee health plans, and more. 

The National Academy for State Health Policy (NASHP) is launching our state legislative health care cost and payment reform tracking for 2026. As in previous years, we are focusing our tracking across the following categories (see active trackers below):

• Lowering Prescription Drug Costs 
• Lowering Health System Costs 
• Health Care Payment and Delivery System Transformation 

NASHP anticipates some of the themes that emerged during the 2025 state legislative session will continue in 2026. There were varied health care cost policies throughout the last state legislative session that spanned all three of NASHP’s bill tracking categories. Some of the themes we observed include: 

• Increased oversight of pharmacy benefit managers (PBMs) to address spread pricing, the practice in which PBMs retain a portion of the manufacturer’s drug rebate and/or health plans’ reimbursement for a drug as payment for their services. States’ approaches varied, including banning spread pricing in contracts, requiring health plans pay PBMs an administrative fee for their services, compelling PBMs to pass along the full rebate to plans, and more. The common goal across these policies was to de-link PBM compensation from a drug’s rebate amount and create more transparency.   

• Focus on addressing market consolidation for both medical providers and throughout the pharmacy supply chain. Over a dozen states pursued bills prohibiting anti-competitive terms, such as non-compete and non-disclosure clauses, from contracts between physicians and health systems. Oregon and California enacted corporate practice of medicine (CPOM) laws to restrict private equity investors from owning physician practices or making clinical decisions. Separately, but aligned in principles, states sought to support independent pharmacies by prohibiting PBMs from steering patients to specific pharmacies or from reimbursing their affiliated pharmacies at a higher rate than others.
• Establishing price and payment ceilings by benchmarking reimbursement for hospital care and prescription drugs to known, more transparent sources. For example, thirteen states introduced reference-based pricing to Medicare or paying hospitals at a multiple of Medicare’s rate. States introduced variations of the policy from a targeted pilot to a market-wide change. For example, Washington enacted a law requiring its state employee health plan reimburse no more than 200 percent of Medicare’s rate for in-network in- and out-patient hospital services, while out of network services will be reimbursed at a lesser amount. The law does require reimbursement for pediatric services for two hospital facilities use a Medicaid benchmark. Further, the law set a floor of 150 percent of Medicare’s rate for primary care and behavioral health reimbursement. In a different approach, Indiana’s new law requires hospitals to offer employers direct contracting options at or lower than 260 percent of Medicare’s rate.

Multiple states also introduced bills to set an upper payment limit using publicly available prices for prescription drugs — most often the Medicare Maximum Fair Price (MFP). The specifics of the proposed legislation varied, but the common goal was to increase transparency and lower drugs for state agencies, health plans, and/or pharmacies. Vermont, for example, passed a law that limits hospital reimbursement for prescription drugs to 120 percent of the Average Sales Price, as calculated by the Centers for Medicare and Medicaid Services. 

NASHP will regularly update our legislative tracking throughout the session and document enacted laws to support state learning. If you have information about legislation that does not appear on our trackers, please email the specified NASHP contact to help us capture all relevant legislative activity.