“They’re the folks that work at restaurants. They’re the teacher’s aides,” said Starr, a registered nurse who became Open Door’s chief executive more than six years ago. Those patients, he said, are “really the heart and soul of rural America.”

He said if his remote health centers don’t get a share of the billions of dollars Congress earmarked to transform health care in rural America, patients may soon lose services. About 50% of Open Door’s 60,000 patients are on Medicaid, the joint state and federal insurance program that, together with the related Children’s Health Insurance Program, covers with low incomes or disabilities.

When Congress approved the One Big Beautiful Bill Act last summer, it cut nearly $1 trillion from Medicaid over the next decade. Now, Starr hopes the $50 billion Rural Health Transformation Program, which was part of the same bill, will help keep his patients covered.

Yet, small community health care providers, such as Open Door, may find they are sharing the billions with an army of corporate giants before it reaches their patients.

Months after federal leaders announced that all 50 states won first-year awards, ranging from $147 million for New Jersey to $281 million for Texas, state plans reveal that a heavy dose of prescribed spending will go to companies that can increase the use of electronic health records, strengthen cybersecurity, and improve state and health system technology platforms.

And at least four large-scale coalitions of companies are now pitching multipronged services to the states. Many of the companies already work with regional health systems and states through Medicaid contracting or mobile and telehealth operations.

How those services will help improve the health care of rural Americans at places such as Open Door remains an open question.

States Stare Down Reporting Deadlines

Federal regulators were “really interested in seeing digital health investments” when they crafted the five-year rural health program rules last year, said Maya Sandalow, an associate director at the Bipartisan Policy Center, a think tank based in Washington, D.C. She co-authored a recent report on how the 50 states plan to invest in technology, including modernizing health care infrastructure and expanding virtual care options such as telehealth and remote patient monitoring.

“The rural health fund isn’t really designed to directly replace or offset the lost Medicaid funding,” Sandalow said, noting that the federal staffers in charge of the program — money that could help rural hospitals and clinics pay for patient care — at 15% of the total funding awarded to a state.

Federal regulators also established tight reporting deadlines, forcing states to move quickly.

States must file progress reports and obligate all first-year funding , according to the Centers for Medicare & Medicaid Services, the federal agency overseeing the program. States could see their awards decreased or terminated at any time if they fail to follow federal requirements, according to the .

As of early April, CMS had not approved or had only partially approved some state budgets, including those of Wyoming, Colorado, and Vermont, according to state officials. CMS spokesperson Catherine Howden, who declined to say which states still needed revised budgets approved, said the agency does not provide “state-by-state updates.”

In Alaska, the budget is approved but the state has not announced when it will release full grant proposals and awards, said Tricia Franklin, program coordinator for Alaska’s rural health transformation.

“Early summer was the target,” Franklin said. But the response from vendors and applicants has been “much greater than expected, so it may take us a little longer.”

Working with consulting companies is an established way for states to “quickly and effectively” meet federal deadlines and roll out grant money, said , national director for population health at the Milbank Memorial Fund, a nonprofit focused on state health policy work.

Upgrading Technology, Modernizing Rural Health

Science Applications International Corp., a Fortune 500 government contractor, pulled together the . SAIC does a variety of technology work such as cybersecurity and engineering support. The alliance also includes Walgreens and Mission Mobile Medical, which turns RVs into primary care clinics. A data analytics company, a telemedicine and software company, and a company that helps place medical graduates in health systems are also part of the coalition.

The SAIC alliance offers “an ecosystem” of companies that can coordinate the work states have promised, said , SAIC’s Rural Health Transformation Program lead and a former chief information officer for the Virginia Department of Health. Each of the companies has representatives focused on the rural program, he said.

A lack of digital infrastructure — such as electronic health records at different clinics and hospitals that can talk to one another — has been a consistent barrier for rural medical care teams, said the Bipartisan Policy Center’s Sandalow.

“The funding hasn’t always been there in order for rural areas to create the infrastructure that’s needed to fully adopt remote patient monitoring, telehealth, artificial intelligence in ways that will really be supportive,” Sandalow said. “It takes things like updating infrastructure, changing workflows.”

Sandalow’s found that Maine and Utah are investing in cybersecurity; Indiana, Missouri, and New Mexico plan to modernize their electronic health records; Oklahoma plans to buy hardware and software, subsidize subscriptions, and give technical support to rural providers; and states such as Arizona and South Carolina will use funds to create telehealth hubs or buy remote patient monitoring equipment.

Federal regulators, when creating the rural program’s spending rules, also said no more than 5% of a state’s total funding awarded could be used to replace electronic medical records systems that already meet federal standards. Sandalow said that means states will focus on enhancements and upgrades to their current systems.

Gainwell Technologies, which operates the systems for dozens of state Medicaid programs, is spearheading . Rushil Desai, a Gainwell senior vice president, said states’ detailed spending plans are “changing in real time.”

Maine’s Medicaid plan contracts with Gainwell, and the state’s initial application listed four contracts worth more than $16 million over five years for the company. The state confirmed it has received federal approval for only its first year of spending, which includes a to implement changes to the state’s Medicaid claims system.

James Lomastro, a senior-care advocate in rural Massachusetts with the nonprofit , said he worries that large vendors and health systems will get the state’s transformation dollars.

Clinics, home care agencies, and nursing homes that “actually provide day-to-day support in the community are mostly on the margins” of state discussions about how to spend the money, he said. A spokesperson for Massachusetts’ Executive Office of Health and Human Services, Olivia James, said state officials would “ensure that everyone has a seat at the table” with training, financial incentives, and direct investments.

Arizona’s rural fund budget, which is $167 million for the first year, allocates for medical diagnostic equipment and technology upgrades, including to electronic health records, specifically for rural health care facilities.

But it also for county public health departments, said Pima County Public Health Director Theresa Cullen. The approved budget includes up to $4 million for grants to support community health workers.

“In these rural communities, you need to be present,” Cullen said.

Alina Czekai, director of the CMS rural health transformation office, said her team plans to visit all 50 states. She spoke at the National Rural Health Association’s policy conference in Washington, D.C., in February and told the audience that her team wants “the money to go to rural communities, rural providers, rural patients.” The association’s members include rural hospitals and clinics, which are expected to suffer big losses under the Medicaid cuts.

In California, Open Door’s Starr said he provided input on his state’s initial application, which won $234 million in first-year funding, but he is not clear on what the next steps will be for getting money from the program.

For his patients, Starr said, money is needed for technology upgrades. After all, he said, updated electronic health systems could operate seamlessly and store the documentation needed to keep a patient enrolled in Medicaid.

Updated technology could be exactly what Open Door and other area clinics need to “help keep people covered,” Starr said.

ºÚÁϳԹÏÍø News senior correspondent Phil Galewitz and rural health care correspondent Arielle Zionts contributed to this report.

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More than 80 of his customers who were enrolled in the same Medicare supplemental plan from the insurer Chubb got hit last August with a 45% increase.

“In my 49 years of doing biz as a broker, I’ve never seen a premium increase be effective immediately on everyone, instead of on their policy anniversary,” said Jaggi, whose brokerage scrambled to find more affordable options for clients. The policies pick up deductibles and other costs not covered in traditional Medicare, and without one there is no upper limit on how much a consumer might owe each year.

While 45% was an unusually big jump, Jaggi and other brokers say double-digit premium increases for Medicare supplemental, or Medigap, policies are becoming the norm.

A Chubb spokesperson did not respond to requests for comment on the increase.

More than 12 million people — of those in traditional Medicare — buy a Medigap policy. Others rely on some sort of retiree employer coverage or a different backup. About 13% of people in traditional Medicare don’t have supplemental coverage, according to KFF, meaning they could be vulnerable to large costs if they have a serious illness.

In the supplemental market, following big increases last year, rates appear to be rising again. In early 2026 filings with state insurance commissioners from Aetna, Blue Cross Blue Shield, Cigna, Humana, Mutual of Omaha, and UnitedHealthcare, rate increases for Plan G policies — the most commonly purchased supplement type — ranged from just in the first quarter, according to Nebraska-based consulting firm Telos Actuarial.

“While this is a small dataset across a select number of states, it’s an indication that carriers are looking to correct their premium rates in light of upward pressure on their claims experience,” said Brett Mushett, a consulting actuary with Telos.

Climbing Numbers

Premium rates vary based on the type of coverage chosen, where a beneficiary lives, and their age. For Plan G coverage, beneficiaries paid an in 2023, according to KFF. That amount has likely risen since.

“In some states, like Ohio, Medicare supplements for years would have a 3% to 5% year-over-year increase. Now it’s 10% to 15%,” said Amanda Brewton, owner of Medicare Answers Now, a marketing organization whose clients are sales agents.

In Alaska, Premera Blue Cross raised the premiums on its Plan G policies by nearly 12% for this year, according to rate sheets provided to ºÚÁϳԹÏÍø News by insurance agent Patricia Mack, who said another insurer raised rates by nearly 13%.

For example, a 65-year-old woman who last year would have been charged $172 a month for a Plan G policy would now face a monthly rate of $192, said Mack, who owns Alaska Insurance Benefits in Wasilla.

Premera spokesperson Courtney Wallace said in an email that Medicare makes changes to deductible and copayment rates each year, which affects supplemental plans that cover those increasing amounts.

Wallace also noted that the insurer saw higher medical service use among its members, “which further drove claims costs and ultimately impacted premiums.”

Agents and policy experts blame a range of factors for rising premiums: an increase in the use of medical services by beneficiaries; the aging of the population; increases in labor and medical costs; rules in some states governing Medigap plans; and people’s enrolling in — or getting out of — private Medicare Advantage plans.

“Five years ago, it was exceedingly uncommon to have a carrier with a rate increase of more than 10%. Now it’s very uncommon to see a rate increase below 10%, and it’s not uncommon to see it over 20%,” said Chalen Jackson, vice president for government affairs at Integrity, a Dallas-based company that sells life and health insurance.

Jaggi, who co-owns Jaggi Petry Insurance & Investments in Forsyth, Illinois, along with his daughter, said he eventually found other options for many of those 80-plus clients with the large increase, which came from an insurer that had previously been the lowest-cost option. But it wasn’t easy — and continuing increases are expected.

“These are unbelievable increases,” said Jaggi, who said he is seeing premium hikes exceeding 15% this year across a range of insurers.

Policy experts have outlined possible solutions, including for Congress to cap out-of-pocket costs for Medicare beneficiaries or subsidize the purchase of Medigap coverage.

“Traditional Medicare is the only federal health insurance program without an out-of-pocket cap,” Sen. Ron Wyden (D-Ore.) wrote in an email, adding that the program “needs to be updated and strengthened to protect the Medicare guarantee for American seniors.”

But making changes to Medicare that require congressional approval is unlikely in the current legislative environment, especially because adding an out-of-pocket cap would add costs to the federal budget.

How This Plays Out

People generally qualify for Medicare when they turn 65. Beneficiaries after they initially enroll in the traditional fee-for-service program to purchase a Medigap plan at standard rates without having to answer health-related questions.

Strict rules then kick in around when beneficiaries can enroll in or switch Medigap coverage and options become much more limited, with each one generally involving trade-offs or tough choices.

have what’s known as a “birthday rule,” which requires insurers once a year to allow people enrolled in a Medigap plan to change to different supplemental coverage — usually around their birthdays — without being medically underwritten. Those rules can help consumers, including those with health conditions, to switch.

An additional — Connecticut, Massachusetts, Maine, and New York — require insurers to offer at least one Medigap policy to all applicants either year-round or during an annual enrollment period, depending on the state. Changes are allowed no matter the person’s health.

Another option for those facing high Medigap costs is to leave traditional Medicare and enroll in a private-sector Medicare Advantage plan, which have out-of-pocket caps. But joining one means beneficiaries must generally rely on a set of in-network doctors and hospitals. And if they change their mind and want to go back to traditional Medicare, they have only a 12-month window in which to purchase a Medigap plan without passing health questions. After that, it can be more difficult.

“A lot of people don’t know that if they are in Medicare Advantage for a year, they can get turned down by a Medigap plan or charged really high premiums because of a preexisting condition, which for many people effectively traps them in MA plans,” said , a research associate at the liberal Center for American Progress and co-author of a on the issue.

There are some exceptions. For example, if a Medicare Advantage plan withdraws from a market or leaves the Medicare program, its enrollees can qualify for a supplemental plan without being asked health questions or charged more for having preexisting conditions.

For this year alone, about 2.6 million people when their insurer pulled out of their markets, according to KFF, and more than a million lost coverage for 2025. Many switched to other MA plans, but “somewhere around 440,000 of those people did go to a Medicare supplement policy,” sometimes because there was no other MA plan in their area, said George Dippel, president of Deft Research, a Minneapolis-based market research organization focused on insurance for older people. Deft is part of Integrity, the Dallas company.

Some Medicare experts note that anytime insurers enroll people whose health status they can’t consider — whether because of birthday rules or because their Medicare Advantage plan left the market and thus qualified them for an exemption from medical underwriting — it potentially exposes them to more health care utilization and higher costs, making them more likely to increase premiums across the board to offset the possible financial hit.

Another option mentioned by brokers for people looking to lower their costs is to consider one of the two types of Medigap plans that come with a deductible, which is currently just under $3,000 for a year. Those plans charge far lower monthly premiums than Medigap plans that pick up a much larger portion of annual amounts people must pay toward their Medicare services.

Still, “a lot of people are not comfortable with a $3,000 deductible,” Mack said.

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“The first time, it’ll ring interminably. Next time, it’ll go to a voicemail that just hangs up on you,” said the 48-year-old, who lives in Delaware. “Sometimes you’ll get a person who says they’re not the right one. They transfer you, and it hangs up. Sometimes, it picks up and there’s just nobody on the line.”

She spent months trying to figure out whether her Medicaid coverage had been renewed. As of late March, she hadn’t been reapproved for the year for the state-federal program, which provides health insurance for people with low incomes and disabilities.

Crouch, who suffered a debilitating brain aneurysm a decade ago, also has Medicare, which covers people who are 65 or older or have disabilities. Medicaid had been paying her monthly Medicare deductibles of $200, but she’d been on the hook for them for the past three months, straining her family’s fixed income, she said.

Crouch’s challenges with Delaware’s Medicaid call center aren’t unique. State Medicaid agencies can struggle to keep enough staff to help people sign up for benefits and field calls from enrollees with questions. A shortage of such workers can keep people from fully using their benefits, health policy researchers said.

Now, congressional Republicans’ One Big Beautiful Bill Act, which President Donald Trump signed into law last summer, will soon demand more from staff at state agencies in places where lawmakers expanded Medicaid to more low-income adults — nearly all states and the District of Columbia.

Under the law, which is expected to reduce Medicaid spending by almost $1 trillion over the next eight years, these staffers will have to not only determine whether millions of enrollees meet the program’s new work requirements but also verify more frequently that they qualify for the program — every six months instead of yearly.

ºÚÁϳԹÏÍø News reached out to agencies that will need to stand up the work rules, and many said they’ll need additional staff.

The mandates will put extra strain on an already-stressed workforce, potentially making it harder for enrollees like Crouch to get basic customer service. And many could lose access to benefits they’re legally entitled to, said consumer advocates and health policy researchers, some of them with direct experience working at state agencies.

States are already “struggling significantly,” said Jennifer Wagner, the director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities and a former associate director of the Illinois Department of Human Services. “There will be significant additional challenges caused by these changes.”

Long Wait Times for Help

Republicans argue the Medicaid changes, which will take effect Jan. 1, 2027, in most states, will encourage enrollees to find jobs. Research on other Medicaid work requirement programs has found little evidence they increase employment.

The Congressional Budget Office would cause more people to lose health coverage by 2034 than any other part of the GOP budget law. It said last year more than 5 million people could be affected.

Many states don’t have the staff to process Medicaid applications or renewals quickly, said consumer advocates and researchers.

The Centers for Medicare & Medicaid Services tracks whether states can handle the most common type of benefit application within a 45-day window.

In December, about 30% of all Medicaid and Children’s Health Insurance Program, or CHIP, applications in Washington, D.C., and Georgia to process. More than a quarter took that long in Wyoming. In Maine, 1 in 5 applications missed that deadline.

CMS began publicly sharing state Medicaid call center data in 2023, revealing a taxed system, researchers and consumer advocates said.

In Hawaii, people waited on the phone for more than three hours in December. They waited for nearly an hour in Oklahoma, and more than an hour in Nevada.

In 2023, state Medicaid agencies began making sure enrollees who were protected from being dropped from the program during the covid pandemic still qualified for coverage. That Medicaid unwinding process didn’t go well in many states, and lost their benefits.

Health policy researchers and consumer advocates say rolling out the new Medicaid rules will be a bigger challenge. The Medicaid work rules will require extensive IT system changes and training for workers verifying eligibility on a tight timeline.

“It is a much larger scale of administrative complexity,” said Sophia Tripoli, senior director of policy at Families USA, a health care consumer advocacy organization.

After months of trying to get someone on the phone, Crouch said, she finally got answers to questions about her Medicaid benefits after writing to the office of U.S. Rep. Sarah McBride (D-Del.). McBride’s office contacted the state’s Medicaid agency, which eventually called with an update, Crouch said.

Crouch didn’t qualify for Medicaid after all. She said that had never come up in two years of interactions with the state.

“It makes absolutely no sense” that the state never realized she shouldn’t have been on the program, Crouch said.

Delaware’s Medicaid agency didn’t respond to requests for comment on Crouch’s situation.

States Short-Staffed for Medicaid

Some states told ºÚÁϳԹÏÍø News in late March that they’ll need more staff to roll out the work rules effectively.

Idaho said it has 40 eligibility worker vacancies. New York estimated it will need 80 new employees to handle the additional administrative work, at a cost of $6.2 million. Pennsylvania said it has nearly 400 open positions in county human services offices in the state. Indiana’s Medicaid agency has 94 open positions. Maine wants to hire 90 additional staffers, and Massachusetts wants to hire 70 more.

As of early March, Montana had filled 39 of 59 positions state officials projected it would need. The state still plans to roll out the rules early, starting July 1, despite its long struggle with system backlogs that applicants said have delayed benefits.

Missouri’s social services agency has been cutting staff and has 1,000 fewer front-line workers than it did roughly a decade ago — with more than double the number of enrollees in Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, according to comments Jessica Bax, the agency director, made in November.

“The department thought that there would be a gain in efficiency due to eligibility system upgrades,” Bax said. “Many of those did not come to fruition.”

States could have a hard time finding people interested in taking those jobs, which require months-long training, can be emotionally challenging, and generally offer low pay, said Tricia Brooks, a researcher at the Georgetown University Center for Children and Families.

“They get yelled at a lot,” said Brooks, who formerly ran New Hampshire’s Medicaid and CHIP customer service program. “People are frustrated. They’re crying. They’re concerned. They’re losing access to health care, and so sometimes it’s not an easy job to take if it’s hard to help someone.”

States are paying government contractors millions of dollars to help them comply with the new federal law.

Maximus, a government services contractor, provides eligibility support, such as running call centers, in 17 states that expanded Medicaid and interacts with nearly 3 in 5 people enrolled in the program nationally, according to the company.

During a February earnings call, company leadership said Maximus can charge based on the number of transactions it completes for enrollees, independent of how many people are enrolled in a state’s Medicaid program.

Maximus has “no one-size-fits-all approach” to the services it offers or the way it charges for those services, spokesperson Marci Goldstein told ºÚÁϳԹÏÍø News.

The company, which reported bringing in $1.76 billion in 2025 from the part of its business that includes Medicaid work, expects that revenue to continue to grow, even as people fall off the Medicaid rolls, “because of the additional transactions that will need to take place,” David Mutryn, Maximus’ chief financial officer and treasurer, said during the earnings call.

Losing Medicaid health coverage isn’t just an inconvenience, since many people enrolled in the program probably don’t make enough money to pay for health care on their own and may not qualify for financial help for Affordable Care Act coverage, said Elizabeth Edwards, a senior attorney with the National Health Law Program.

People could be unable to afford medications or get essential care, which could lead to “devastating” health impacts, she said.

“The human stakes of this are people’s lives,” she said.

ºÚÁϳԹÏÍø News correspondents Katheryn Houghton and Samantha Liss contributed to this report.

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The , the public health insurance program that pairs state and federal money. Federal officials have announced unprecedented actions in Minnesota this year, declaring they could withhold over $2 billion in payments slated for the state and claw back nearly $260 million from last year.

The actions in Minnesota came as part of the administration’s declared crackdown on fraud, but critics have likened them to using a bludgeon instead of a scalpel, probably harming patients who rely on Medicaid for care but are not responsible for fraud in the program.

“It’s going to hurt a lot of people if they end up going through with this,” said Sumukha Terakanambi, a 27-year-old who has Duchenne muscular dystrophy and works as a public policy consultant with the Minnesota Council on Disability.

“Of course we support going after fraud,” Terakanambi said, but “this overly aggressive action is missing the point. It’s not punishing fraudsters. It’s punishing the people.”

Longtime Medicaid observers also doubt the federal actions will achieve their purported objective.

, a senior managing director with the consulting firm Manatt, that actions of this magnitude by the federal government are unprecedented, partly because punitive measures against states have “really never been an effective way to address fraud.”

Meanwhile, fraud prosecutions as the U.S. attorney’s office there grapples with the exodus of nearly half its attorneys and a surge in cases from the Trump administration’s immigration crackdown.

Despite these concerns, Centers for Medicare & Medicaid Services head Mehmet Oz said the techniques the federal government is using in Minnesota could be applied to other states, and he has launched social media campaigns alleging high-dollar public benefit fraud in , , , and . And a February release of by the Trump administration’s Department of Government Efficiency appears to be part of a campaign to paint the program as riddled by fraud, Guyer said.

, a research professor at Georgetown University’s Center for Children and Families, said that campaign by the administration seems particularly focused on services designed to keep people with disabilities out of institutions, and he described withholding $2 billion from Minnesota’s Medicaid program as “.”

A ‘Political Football’

Scrutiny of Minnesota’s public benefit programs began early in the Biden administration, years before the most recent investigations. The spotlight on the state’s Medicaid system grew after FBI raids in December 2024.

The following May, an into Medicaid housing stabilization services in Minnesota prompted further scrutiny from federal prosecutors, and from Gov. Tim Walz.

Under the Democratic governor, the state launched investigations into 85 autism providers, ordered a third-party audit of 14 types of Medicaid services deemed to be “high-risk” for fraud, and delayed payments for those services for up to 90 days. Many of the services are ones people with disabilities receive at home, making them more difficult to monitor.  

Terakanambi worried the state’s “heavy-handed approach” would destabilize the entire home care system. While his own care was not disrupted — his parents provide the 10 hours of daily personal care he qualifies for through Medicaid — other Minnesotans with disabilities have said they experienced interruptions and .

In December, one man was after losing his in-home care services amid the crackdown.

“We’re losing sight of the people that have done nothing wrong, that rely on these supports and services to live in the community,” said Sue Schettle, chief executive of , a Minnesota nonprofit that represents organizations supporting people with disabilities. “It becomes a political football.”

Schettle said she took her concerns about the crackdown to state officials, who have since met routinely with her and other advocates. The subsequent federal actions, however, have left her “shell-shocked,” she said.

The ‘Nuclear Option’

In December, a , with help from state Republicans, supercharged the issue in Minnesota, alleging widespread fraud in child care centers owned by members of the Somali community. A follow-up state investigation of the child care centers that were featured in the video determined that all were “.”

On Jan. 6, CMS’ Oz sent Walz a letter alleging Minnesota’s Medicaid program was out of compliance with federal rules on fraud, waste, and abuse, setting the stage for the Trump administration’s move to withhold over $2 billion in federal Medicaid funds to Minnesota this year, about 18% of what the state received the year before.

Minnesota is appealing.

The Republican-aligned Paragon Health Institute, a think tank that recently published a calling for similar enforcement actions across the country, applauded the federal moves.

“That will spur states to take necessary action, thus ensuring that Medicaid funds go to those who are truly eligible,” said , a legal research analyst who co-authored the brief.

Georgetown’s Schneider questioned the necessity and effectiveness of withholding the money.

“I don’t see any relationship between that and actually reducing fraud against the Minnesota Medicaid program, given the state has already taken a lot of action,” he said.

In late February, Oz went further, announcing that on top of withholding $2 billion in future payments to Minnesota, the administration was in federal Medicaid payments to the state.

“We have notified the state that we will give them the money, but we are going to hold it and only release it after they propose and act on a comprehensive corrective action plan to solve the problem,” Oz said at with Vice President JD Vance.

Minnesota the deferment in court.

“We’re waiting for feedback from CMS on our corrective action plan, which is why we were surprised and confused when Dr. Oz said in a news conference with the vice president last week that we needed to provide one,” Minnesota Medicaid director John Connolly said at a March 3 news briefing.

‘Another Minnesota’

Oz and Vance both said during the February news conference that they are not specifically targeting Democratic-led states. Oz noted Florida has a “big fraud problem” and in mid-March sent a letter to state officials with a list of questions about their Medicaid program. Until then, the letters and most of Oz’s social media videos had been limited to California, Maine, and New York, all led by Democrats.

“We might have another Minnesota on our hands,” Oz said in posted the same day as sent to Maine Gov. Janet Mills, a Democrat, requesting information on how the state was addressing Medicaid fraud.

“And if we’re not satisfied with their progress, we reserve the right to cut off payments entirely,” Oz said in the video.

The video and letter were prompted by a in Maine that found the state had made at least $45.6 million in improper Medicaid payments. Similar audits in , , and had comparable findings.

In , Mills called Oz’s letter a “pretense to send ICE and other weaponized federal agents into states led by Democrats.”

CMS spokesperson Chris Krepich said the agency does not take funding actions lightly. “The focus is on strengthening oversight, improving accountability, and ensuring that vulnerable patients receive the services they are entitled to,” Krepich said.

But Terakanambi said it’s not difficult to see how federal actions like those in Minnesota could put services in jeopardy. The amount of money Minnesota could lose from the CMS actions announced this year is already equivalent to about two-thirds of the state’s rainy-day fund.

Many states are looking to or even funding for home care services over much smaller budget shortfalls. And further cuts are anticipated, with congressional Republicans’ One Big Beautiful Bill Act, signed into law last year, expected to reduce federal Medicaid spending by more than $900 billion over the next decade.

“People will die,” Terakanambi said. “People will lose critical supports and will no longer be able to participate in their community the way they want to.”

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Oz, who heads the U.S. Centers for Medicare & Medicaid Services, there was approximately $3.5 billion of fraud in the hospice and home health care industry in Los Angeles County alone. “This administration under President [Donald] Trump is not going to tolerate taxpayer dollars being stolen because people aren’t paying attention anymore. We’re focused on this,” . He claimed the fraud was largely orchestrated by the “Russian, Armenian mafia” and said that most of the money spent on home and community-based services across California “might be fraudulent.”

However, CMS clarified that not all billing activities referenced by Oz were presumed to be improper. And a review of the most recent available data shows that there are hotbeds of health care fraud across the country and across practice areas, most of them allegedly perpetrated by health insurers and other domestic actors, and that California outperforms most other states in recovering fraud dollars.

As the temperature heats up in the conflict between the Trump administration and California, a handful of Republican state lawmakers have entered the fray, accusing Gov. Gavin Newsom in of allowing “rampant fraud.” Democratic state officials insist they aggressively combat fraud, and Newsom has filed a against Oz, calling language in the allegations “baseless and racially charged.”

“The Trump Administration is attempting to take the issue of fraud — a very real, and national issue — and weaponize it against Democratic states,” California Attorney General Rob Bonta said in an early February statement.

Oz said that he would halt “hundreds of millions of dollars” in payments to California if he didn’t get satisfactory answers from state officials. He and Vice President JD Vance announced in late February that they would delay about $260 million in Medicaid payments , another Democratic-led state, over fraud allegations there, and the state is now suing.

Oz has also launched social media campaigns alleging high-dollar public benefit fraud in Democratic-led Maine and New York. On March 17, he added a Republican-led state to his target list: Florida.

Georgetown University professor Andy Schneider, who served as a senior adviser primarily on Medicaid integrity issues during the Obama administration, said fraud has always been an issue across states, dating back decades. About $3.4 billion in Medicare and Medicaid fraud across the country was , according to the most recent report available. Insurers have paid the highest settlements in alleged health care fraud schemes.

“Bad actors trying to steal public health care funds have been around for a long time,” Schneider said.

How California Stacks Up

The federal government is responsible for Medicare, which primarily benefits older people, while Medicaid, which primarily serves people with lower incomes, is a joint federal-state program. Melissa Rumley, a spokesperson for the Department of Health and Human Services’ Office of Inspector General, said the office could not make state-by-state data on Medicare fraud available because the federal probes often cross jurisdictions.

States file annual reports on actions by Medicaid anti-fraud units that are jointly funded with the federal government and run by state attorneys general. They investigate fraud as well as abuse and neglect of Medicaid patients.

These reports provide a sense of the scale of Medicaid fraud across states. In fiscal 2024, states recovered , compared with $949 billion in total Medicaid spending, according to from the HHS Office of Inspector General. California recouped an outsize share, recovering more than 50% of all the criminal recoveries made by the anti-fraud units nationwide in fiscal 2024 even though the state made up only about 17% of enrollment.

California ranked fourth in the U.S. in 2024 in dollars recovered per Medicaid enrollee across civil and criminal investigations, behind the District of Columbia, Montana, and Delaware. It led all the most populous states, followed in order by Texas, Florida, and New York. (California and federal officials noted that state recovery data varies significantly year to year, often because of the length of investigations.)

Vulnerability of Hospice Care

One aspect of health care fraud that has been at the center of Oz’s attack on California is hospice fraud, which has plagued Republican and Democratic administrations.

The use of hospice, intended to provide care to patients expected to die within six months, increased by over 8% from fiscal 2020 to 2024, to about 1.84 million Medicare beneficiaries, significantly.

To combat fraud, the Biden administration in 2023 of hospices in California, Arizona, Nevada, and Texas. The Trump administration Ohio and Georgia.

CMS spokesperson Chris Krepich did not say specifically what criteria were used to choose which states to monitor, only that the decision was based on “activity typically indicative of hospice-related fraud.” As of June, the agency had revoked the Medicare enrollment of 122 hospices in the original four states, but Krepich said a breakdown by state was not available.

While Oz stated there was some $3.5 billion of fraud in the hospice and home health care industry in Los Angeles County alone, his agency clarified that the number is for overall Medicare billing related to hospice and home health services. Krepich said that “not all billing activity referenced in the remarks is presumed to be improper” and added that the agency could not identify the amount of fraudulent activity until an “evidence-based” investigation was completed.

That’s not to say there is no truth to allegations of hospice fraud.

A published in 2022 found “numerous indicators” of large-scale fraud in Los Angeles County, and a highlighted nearly 500 hospices within a 3-mile radius, including 89 companies registered to a single building in Van Nuys. that “hospice fraud has become an epidemic in California.” He noted that state officials have been aggressively combating it for years, including with .

In January, the state in Monterey County with hospice fraud. That follows hospice scam cases in and .

However, California public health officials are overdue in adopting that were supposed to be . The state’s Department of Public Health is currently revising the regulations, according to spokesperson Mark Smith.

In the interim, the state has revoked the licenses of more than 280 hospices over the past two years and is evaluating an additional 300 hospices, . California had licensed hospice agencies as of 2022, according to the state audit.

Civil Rights Complaint

Meanwhile, Newsom is pushing back on Oz. The governor filed his discrimination complaint with the at HHS, which oversees CMS. The office said it will first decide whether it has the authority to investigate, then, if so, will gather information through interviews and documents. However, the process seems designed to aid individuals who have lost a job to discrimination, or to correct a specific policy, and it is unclear whether there could be any real-world consequences.

The governor wants the agency to address “systematic bias from their leadership,” said Newsom spokesperson Marissa Saldivar.

Krepich said CMS “does not target communities, ethnic groups, or states” and bases its decisions on “confirmed investigative findings.” The allegations of organized fraud refer to “documented criminal cases,” Krepich said, providing a link to in which California residents were convicted of using the identities of foreign nationals to steal almost $16 million from Medicare.

It’s unclear what cases Oz was referring to when he spoke of the Russian and Armenian mafia.

Ciaran McEvoy, a spokesperson for the U.S. attorney’s office for the Central District of California, which includes Los Angeles County, said it doesn’t track whether hospice fraud defendants are alleged to be foreign nationals, but he pointed to the office’s online prosecution announcements. None alleged involvement by foreign influences or organized crime.

The state audit references by the U.S. Justice Department under President Barack Obama that an “Armenian-American organized crime enterprise” was behind a nationwide health care scam.

Federal officials at the time described an “international organized crime enterprise” based in Los Angeles and New York but with roots in Russia and Armenia. The scheme involved billing for unneeded medical treatments, not hospice fraud.

A revealed fraud schemes in which hospice operators recruited patients who were not actually terminally ill, then paid kickbacks to doctors who falsely certified these patients as dying so the hospices could bill Medicare. There was no mention of foreign involvement.

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But there’s a catch: If people want to move to original Medicare and buy a supplemental Medigap insurance plan to cover some out-of-pocket costs, they may not be able to. Medigap insurers can generally refuse coverage to applicants whose medical history or current health problems might make them expensive to cover, a process called medical underwriting.

“We really want people to factor that in,” said , managing policy attorney at the Center for Medicare Advocacy. “If someone is in a Medicare Advantage plan for several years and then wants to switch to original Medicare, they may find they can’t switch and also get a Medigap plan.”

There are many reasons people might want to trade their MA plan for traditional Medicare. Although MA managed-care plans are typically cheaper and offer benefits not available in original Medicare, such as coverage for vision and hearing services, they have smaller provider networks than the original program and, sometimes, extensive prior authorization requirements.

In addition, as Medicare Advantage plan in recent years, a growing number of plans are pulling out of areas they used to serve, leaving members with fewer options. This year, an estimated 1 in 10 MA plan members will be forced out of their plans for this reason, according to a in February.

“We saw some Medicare Advantage plans that just left the market completely and stopped issuing plans,” said Emily Whicheloe, education director at the Medicare Rights Center.

For those considering a switch to original Medicare, getting a Medigap plan can be tricky. Federal law provides a one-time, for people 65 or older and newly covered by Medicare Part B to sign up for any Medigap plan without underwriting. After that initial sign-up period ends, however, there are fewer coverage guarantees.

But some do exist. Here are a few key circumstances and time frames when people are guaranteed a Medigap plan without having to undergo underwriting:

• People who live in Connecticut, Massachusetts, or New York can sign up for a Medigap policy without underwriting. In Maine, there is a one-month window each year when Medigap insurers must offer Plan A to all comers without underwriting. (Plan A provides less comprehensive coverage than some of the other standardized plan types.)
• People who sign up for a Medicare Advantage plan when they are first eligible for Medicare Part A at age 65 can switch to original Medicare within the first year and buy a Medigap plan too. This is sometimes called the “.”
• If a Medicare Advantage plan leaves Medicare or in an area, affected enrollees can switch to original Medicare and buy a Medigap plan either 60 days before or up to 63 days after their MA coverage ends. During this special enrollment period, they can’t be turned down or charged more based on their health.
• If an individual and no longer has access to their Medicare Advantage plan providers, they can switch to original Medicare and apply for a Medigap policy either 60 days before or up to 63 days after their MA coverage ends. That typically happens when someone notifies the plan of their permanent move or the plan discovers it, said , a training, policy, and technical assistance consultant at California Health Advocates who specializes in Medicare and Medigap coverage.

There are other circumstances when someone might qualify for a special enrollment period under federal rules, and states may have additional qualifying events that are more generous than federal standards.

Patient advocates emphasize that it’s often useful to work with a counselor at the , or SHIP, for free, unbiased help figuring out Medigap coverage options. SHIP counselors can help applicants identify potential avenues to qualify for Medigap coverage without underwriting at both the federal and state levels.

People who don’t qualify for a guaranteed right to a Medigap plan without underwriting may still be approved for coverage. Premiums may be higher, however, and plans may impose a waiting period of up to six months for coverage of preexisting medical conditions in certain circumstances.

Beware: More Underwriting

In recent years, some Medigap insurers have spent a growing percentage of premiums on medical claims, putting pressure on profits, Burns said. “Medigap insurers’ underwriting has tightened up considerably recently,” she said.

The list of health conditions that Medigap insurers might deny coverage for is long, including Alzheimer’s disease, asthma, cancer, congestive heart disease, diabetes with complications, end-stage renal disease, high blood pressure, and stroke, among others, according to a of leading insurers’ applications.

When people apply for a Medigap plan that will be medically underwritten, they will typically be asked to fill out a health questionnaire, said , a principal and consulting actuary at Milliman who is a Society of Actuaries fellow. Increasingly, insurers are requesting that people agree to a prescription drug background check, Ortner said.

“Oftentimes, that prescription drug history may be the primary driver of a decision as it relates to underwriting,” he said, rather than a physical exam or medical records review.

Insurers don’t all have the same underwriting rules, however. Here again, a SHIP counselor may be useful for pointing people to specific companies that accept applicants with a particular medical diagnosis, or have different waiting periods or coverage exclusions.

“They have access to a Medigap comparison tool in addition to what is existing on that can give you a very good estimate of what you may pay for those Medigap plans,” said , associate director of health coverage and benefits at the National Council on Aging.

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Within a few days, Reynolds became so desperate that she and her husband had to physically restrain Jonah, dumping pain medication down his throat as he screamed in pain.

“It broke our hearts,” said Reynolds, who lived in Georgetown, Kentucky, at the time. “And I remember just thinking that it shouldn’t have to come to that.”

Reynolds couldn’t find a dentist with an opening who could treat Jonah, who is autistic and often resists dental exams due to hypersensitivity and anxiety. Over the course of five days, Reynolds took Jonah twice to a nearby emergency room as he struggled with persistent pain and a fever due to a likely infected tooth with an exposed nerve. The ER had no dentists; both times, the family was sent home with only pain medication and an ice pack.

Across the nation, more children are entering ERs for preventable tooth problems. Dentists, hygienists, and researchers attributed that trend to a shortage of pediatric dental care professionals in and worsening oral hygiene since the covid-19 pandemic. Tens of thousands of kids end up in the hospital for dental emergencies each year, according to Melissa Burroughs, senior director of policy and advocacy at the national health nonprofit CareQuest Institute for Oral Health.

ER visits for tooth problems unrelated to physical injuries for children under 15 years old from 2019 to 2022, according to a report released late last year by CareQuest. And local data reflects that national trend: At Children’s Hospital Colorado in the Denver area, nontraumatic dental cases, such as cavities or gum infections, in its ER increased 175% from 2010 to 2025, according to hospital spokesperson Sarah Bonar. In Kentucky, where Jonah lives, children’s visits to the ER for dental problems rose 72% from 2020 to 2024, according to the state.

Policy changes under the Trump administration are poised to worsen the trend. President Donald Trump’s 2025 federal budget reconciliation law, known as the One Big Beautiful Bill Act, called for billions in cuts from Medicaid, which may force states to limit or drop dental coverage from the public insurance program for those with low incomes or disabilities. New eligibility requirements for Medicaid in some states could affect kids’ access to dental care, even though children are guaranteed dental coverage under the program. Research shows that when parents lose Medicaid, even kids with coverage are more likely to have and to go to a dentist.

The Trump administration has also promoted skepticism about fluoride. show that fluoride in drinking water and topical fluoride treatments dramatically reduce tooth decay and prevent cavities. In recent months, the Food and Drug Administration against the use of fluoride supplements and the Environmental Protection Agency of “potential health risks of fluoride in drinking water.” Health and Human Services Secretary Robert F. Kennedy Jr. has called fluoride a “” and “.” A 2025 study in JAMA Pediatrics linked high levels of fluoride with lower IQ in children — but only at concentrations the recommended level in public drinking water.

, a pediatric dentist at the University of Washington who studies fluoride hesitancy, worries that these anti-fluoride stances will further erode trust in fluoride treatment. Since the start of 2026, lawmakers in at least 15 states have introduced bills prohibiting or limiting fluoride in public drinking water. Utah and Florida in 2025 became the first states to enact fluoride bans.

“Will that have an effect on cavity rates?” Chi asked. “Absolutely.”

Severe Dental Cases Rise

Pediatric dentists Katherine Chin and Chaitanya Puranik said they are treating more patients like Jonah at Children’s Hospital Colorado. More severe cases have become more common, too. Puranik said he used to typically see patients with only one cavity, but now his patients are often coming in with tooth decay throughout their mouth.

During the pandemic, many dental offices , and studies show children also increased , a major risk factor for cavities. Severe cavities that lead to tooth extraction can affect , sometimes causing long-term problems with or .

Millions of people live in in the U.S., with scant dentists within driving distance. On top of that, only treat Medicaid patients, due to low reimbursement rates, which are on average of their typical dental charges, according to the American Dental Association.

Children with intellectual or developmental disabilities may especially struggle to access quality dental care. Few general dentists have sufficient pediatric training to care for kids with disabilities such as Jonah, who are easily overwhelmed or need to be sedated for an exam, , a health information nonprofit that includes ºÚÁϳԹÏÍø News. Over have special health care needs, and those children are to have unmet dental needs. Their parents are also to finding a dentist.

When he was younger, Jonah would not let his parents brush his teeth, which led to cavities in his baby teeth, his mother said. After Jonah’s first visit to the ER, Reynolds found a general dentist with an opening. But unlike a trained pediatric dentist, she said, the dentist did not know how to examine Jonah in a way he could tolerate and wasn’t prepared to provide sedation. Jonah left without treatment and was soon back in the ER when his fever returned.

ERs Rarely Provide Solutions

, a pediatrician in Washington County, Maine, said he is fielding “the most horrifying cavities” at Down East Community Hospital.

ERs are often ill-equipped to treat dental concerns, Weitz said. Similar to the ER Jonah went to in Kentucky, Down East has no dentists on staff. Weitz often finds himself prescribing antibiotics as a temporary measure.

“But a month later, they’re back again because it’s flaring up again,” Weitz said.

As a potential solution, states such as Maine and Alaska are proposing to use money from the $50 billion to develop the oral health workforce or to create specialized dental care centers, which can better serve children with special health care needs on short notice. But those initiatives won’t address the loss of coverage anticipated from Medicaid cuts. California last year in state grants to develop or expand over 120 dental facilities to serve patients with special health care needs.

Jonah’s dental emergency cost Reynolds a week of work from her job as a dog groomer and Jonah three days of third grade, plus hundreds of dollars in out-of-pocket costs.

Eventually, Reynolds found an oral surgeon who extracted the tooth. But even that went poorly, she said. When Jonah became upset over a needle stick, the surgeon threatened to hold him down, Reynolds said. She said the surgeon left quickly after the procedure and never gave her a clear diagnosis of what caused Jonah’s pain. The procedure did resolve his toothache, but Reynolds said more professionals should know how to handle cases like Jonah’s, with sensitivity to the families. Four years later, forcing Jonah to take his pain meds still lives fresh in her memory.

“That will never leave my mind,” Reynolds said.

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But when Quinn chipped a tooth and it became infected, she could not find a dentist near her home who would accept her government health coverage and was taking new patients.

She went to an emergency room, receiving painkillers and antibiotics, but she remained in agonizing pain weeks later and paid a dentist $200 to extract the tooth.

Years later, it still hurts to chew on that side, she said, but Quinn — a 34-year-old who has four children and, with her husband, earns about $30,000 a year — still can’t find a dentist nearby.

“You should be able to get dental care,” she said, “because at the end of the day dental care is health care.”

The federal government has long required states to offer dental coverage for children enrolled in Medicaid, the joint state-federal health program for people who are low-income or disabled. Paying for adults’ dental care, though, is optional for states.

In recent years, several states have opted to expand the coverage offered by their Medicaid programs, seeking to boost access in recognition of its importance to overall health. So far, increasing adult dental care is a work in progress: In a sampling of six of those states by ºÚÁϳԹÏÍø News, fewer than 1 in 4 adults on Medicaid see a dentist at least once a year.

But under congressional Republicans’ One Big Beautiful Bill Act, which President Donald Trump signed into law last year, the federal government is expected to reduce Medicaid spending by more than $900 billion over the next decade. The range from about $184 million for Wyoming to about $150 billion for California.

State Medicaid programs typically expand or reduce benefits depending on their finances, and such massive federal cuts could force some to shrink or eliminate what they offer, including dental benefits.

“We will lose all the gains we have made,” said Shillpa Naavaal, a dental policy researcher at Virginia Commonwealth University in Richmond.

Tennessee’s Medicaid program, for instance, spent nearly $64 million on its dental coverage in 2024 and saw a 20% decrease in dental-related ER visits, said Amy Lawrence, the program’s spokesperson.

But under the new law, Tennessee is projected to lose about $7 billion in federal funding over the next decade.

As of last year, 38 states and the District of Columbia offered enhanced dental benefits for adult Medicaid beneficiaries, according to the American Dental Association. Most of the others offer limited or emergency-only care. Alabama is the only state that offers no dental coverage for adult beneficiaries.

Since 2021, 18 states have enhanced their coverage to include checkups, X-rays, fillings, crowns, and dentures, while loosening annual dollar caps for benefits.

Use of dental benefits in states with the enhanced benefits is greater than in states with only limited or emergency coverage, though still low overall, according to with the latest data as of December. No more than a third of adult Medicaid recipients saw a dentist in 2022 in any state.

To review more recent progress, ºÚÁϳԹÏÍø News asked one-third of the states that have expanded their benefits in the past five years for their most recent data on the percentage of adults on Medicaid who visit a dentist at least once a year:

• Maryland — 22% (in 2024)
• Oklahoma — 16% (in 2025)
• Maine — 13% (in 2025)
• New Hampshire — 19% (in 2025)
• Tennessee — 16% (in 2024)
• Virginia — 21% (in 2025)

In comparison, about 50% to 60% of adults with private dental coverage see a dentist at least once a year, according to the ADA.

Nationwide, 41% of dentists reported participating in Medicaid in 2024, a share that has remained stable over the past decade despite the dental benefit expansions in many states, the ADA says. Many participating dentists, though, limit the number of Medicaid enrollees they treat, and some will not accept new patients on Medicaid.

Reimbursement rates have not kept up with costs, deterring dentists from accepting Medicaid, said Marko Vujicic, chief economist and vice president at the ADA Health Policy Institute.

Because of a lack of dentists who take Medicaid in southwestern Virginia, the Appalachian Highlands Community Dental Center in Abingdon sees patients who travel more than two hours for care — and must turn many away, said Elaine Smith, its executive director.

The center’s seven residents treated about 5,000 patients last year, most of them on Medicaid. About 3,000 people are on its waitlist, waiting up to a year to be seen.

“It’s sad because they have the means now to see a dentist, but they still don’t have a dental home,” Smith said.

Low-income adults face other barriers to dental care, including a lack of transportation, child care, or time off work, she said.

The inability to see a dentist has consequences broader than tooth pain. Poor dental health can contribute to a host of other significant health problems, such as heart disease . It can also make it harder to do things like apply for jobs and generally lead a healthy life.

Robin Mullins, 49, who has been off and on Medicaid since 2013, said a lack of regular dental visits contributed to her losing her bottom teeth. Unable to find a dentist near her home in rural Clintwood, Virginia, she drives almost 90 minutes to Smith’s clinic — that is, when she can afford to get time away from driving for DoorDash or find help watching her daughter, who has special needs.

She gets by with partial dentures but misses her natural teeth, she said. “It’s absolutely horrible, as you can’t chew your food properly.”

In New Hampshire, though, the challenges have more to do with low demand than a low supply of dentists, said Tom Raffio, chief executive of Northeast Delta Dental, which manages the state’s Medicaid dental program. The company has added new dentists to its list of participating providers, along with two mobile dental units that traverse the state, he said.

Raffio said Northeast Delta Dental also has publicized the state benefits using radio advertising and social media, among other efforts.

Until 2023, New Hampshire Medicaid covered only dental emergencies.

“Culturally, it’s going to take a while,” he said, “as people just are used to not going to the dentist, or going to the ER when have dental pain.”

Brooks Woodward, dental director at Baltimore-based Chase Brexton Health Care, called Maryland’s rate of roughly 1 in 5 adults on Medicaid seeing a dentist in 2024 “pretty good” considering the benefits had been enhanced only since 2023.

Woodward said many adults on Medicaid believe that you go to a dentist only when you’re in pain. “They’ve always just not gone to the dentist, and that’s just the way they had it in their life,” he said.

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The legislation introduced in , , , , , , , and builds on efforts made in other states in past years. This latest push for patient protections comes as the Trump administration has backed away from federal debt protections, health care has become , and more people are expected to go without medical coverage or but riskier high-deductible insurance plans that could lead them into debt.

“In the wealthiest country on Earth, people are going bankrupt, suffering wage garnishment, just because they get sick,” said Colorado state Rep. , a Democrat who introduced legislation on Feb. 19 that would, among other measures, ban wage garnishment for medical debt.

That legislation is under consideration after a ºÚÁϳԹÏÍø News investigation found that courts approved wage garnishment requests in an estimated 14,000 medical debt cases a year in Colorado. The investigation also showed that it isn’t just urban hospitals or big health care chains allowing their patients’ wages to be garnished. It’s also small rural hospitals, physician groups, and public ambulance services, among other medical care providers. And the reporting showed that wage garnishment can erroneously target patients. For example, one family lost wages — and subsequently power to their home, because they couldn’t pay their electric bill — after an ambulance company incorrectly billed the family instead of Medicaid.

Wage garnishment is one tool creditors can use in most states to recoup money from people with unpaid bills. In many states, they can garnish someone’s bank account or put a lien on their home, too. To garnish a person’s wages, a creditor must typically get permission from a court to make the person’s employer hand over a piece of the debtor’s earnings.

“The creditor is taking the money directly out of somebody’s paycheck, and so it doesn’t leave people with any choice to say, ‘I need to prioritize food for my children,’” said , legal and policy director for the National Center for Access to Justice. The center, based at Fordham Law School, and the District of Columbia on how fair their laws are to consumers who get sued over debt.

It is legal to garnish patients’ wages for medical debt in all but a , according to the Commonwealth Fund, a nonprofit foundation based in New York focused on health care.

Now, lawmakers in additional states seek to ban the practice entirely. Others want to limit it by exempting debtors whose household income falls under a certain threshold or by upping the amount of earnings immune from garnishment.

Such policies on wage garnishment fit into a larger push around the country to address the effect of medical debt on people’s lives and finances. Those efforts include barring medical debt from credit reports, prohibiting liens on people’s homes, capping interest rates, and limiting the ability to file lawsuits against people with low incomes over unpaid medical bills.

Debt collectors have fought against such measures, arguing they don’t solve the problem of health care affordability and hurt the ability of medical providers to continue to provide care.

“The wage garnishment process is already highly regulated at the federal and state level and includes many consumer protection measures,” said Scott Purcell, chief executive of , an association of credit and collection professionals.

Even before the Colorado legislation was introduced, BC Services warning its clients that the legislation “poses an existential threat,” especially to rural health providers. And Bridget Frazier, a spokesperson for the , said Feb. 20 that the bill “could drive up costs and financial risk for health care providers, making it harder to keep hospitals sustainable and ensuring Coloradans have access to care when they need it most.”

The pending Colorado measure would ban wage garnishment for all patients. It also would limit bank garnishments, in which a patient’s financial institution must hand over a chunk of the money in the person’s account. Additionally, among other things, it would prevent payment plans from exceeding 4% of weekly net income, require creditors to check whether uninsured patients are eligible for public health insurance before collecting, bar creditors from collecting on bills that are more than three years old, and leave medical care providers liable to the patient for at least $3,000 if collectors don’t comply.

“No one is saying, ‘Don’t get paid for your services.’ We’re saying getting health care should not lead to financial ruin for people,” said Dana Kennedy, co-executive director at the Denver-based , a health advocacy group that has been working with lawmakers on the Colorado measure.

Kennedy said that ºÚÁϳԹÏÍø News’ investigation drove home how many kinds of Colorado health care facilities are willing to let this collection practice happen to their patients, and that the people whose wages are being garnished are often working at Family Dollar, Walmart, Amazon, or gas stations and restaurants.

“Medical debt is typically different from other forms of indebtedness,” said Colorado state Sen. , a Democrat co-sponsoring the legislation. “You could choose to keep driving your old car or buy a new one and take on debt for that. You could upgrade your home. You could buy consumer appliances. There’s not usually that voluntary element in a health care context.”

, a senior attorney with the National Consumer Law Center, said broad laws that don’t require patients to jump through hoops to access protections are the most likely to be effective. Because of that, she and other consumer advocates prefer state policies that get rid of wage garnishment for all debtors and all types of debt.

“It can be hard to identify medical debt as medical debt,” Carter said. “For example, if you have a medical debt and you put it on your credit card, it’s not going to be easy for a court system to identify that debt as medical debt.”

She said another reason is that complexity is the enemy of effectiveness. Carter pointed to a showing that even though people in the state can keep $10,000 in their bank accounts safe from garnishment, few consumers take advantage of the protection. They must know the protection exists, know where to find the relevant form, get the form notarized, file it, and mail copies to creditors. The same report found that garnishments can also be burdensome for employers, who must process garnishments and can find themselves in court if they make an error.

Jones, at the National Center for Access to Justice, said outlawing wage garnishment fully, rather than limiting it, has other benefits. “It’s also to protect people’s jobs, because in most states, if somebody has two or more orders of garnishment, they can lose their job for it,” she said.

Still, some lawmakers are pushing for the intermediate route. In Washington state, Democratic state Sen. is spearheading legislation to rope off a larger portion of low-wage earnings from garnishment. So, for example, a person making $1,000 a week would be able to keep their whole paycheck, as opposed to the $800 that the law would currently protect.

Mindy Chumbley, owner of a Washington-based collections company and an ACA International board member, testified against the bill on Feb. 2. “Washington has made sweeping changes to medical debt policy year after year without pausing to study the cumulative impact,” she told lawmakers. “Our clients are reporting clinic closures, urgent care centers shutting down, staffing shortages, and rural facilities struggling to stay open.”

The Washington State Hospital Association said it is neutral on the legislation. The American Hospital Association said it does not take positions on state policies.

Liias told ºÚÁϳԹÏÍø News that lawmakers need to ensure health care providers can recoup their costs while also protecting patients. “We don’t want families either to be driven into bankruptcy or to be driven into under-the-table work to avoid these garnishment thresholds,” he said.

Liias said his measure follows the lead of Arizona, which passed similar consumer protections in 2022. “Obviously, the health care system is still functioning in Arizona, and folks are able to make it work.”

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Those preliminary numbers from the open enrollment period that ended in January are less than a third of what state officials had projected. Nevada is the third state so far to launch a public option plan, along with Colorado and Washington state. The idea is to offer lower-cost plans to consumers to expand health care access.

But researchers said plans like these are unlikely to fill the gaps left by sweeping federal changes, including the expiration of enhanced subsidies for plans bought on Affordable Care Act marketplaces.

The public option gained attention in the late 2000s when Congress considered but ultimately rejected creating a health plan funded and run by the government that would compete with private carriers in the market. The programs in Washington state, Colorado, and Nevada don’t go that far — they aren’t government-run but are private-public partnerships that compete with private insurance.

In recent years, states have considered creating public option plans to make health coverage more affordable and to reduce the number of uninsured people. Washington was the first state to launch a program, in 2021, and Colorado followed in 2023.

Washington and Colorado’s programs , including a lack of participation from clinicians, hospitals, and other care providers, as well as insurers’ rate reduction benchmarks or lower premiums compared with other plans offered on the market.

Nevada law requires that the carriers of the public option plans — Battle Born State Plans, named after a state motto — lower premium costs compared with a benchmark “silver” plan in the marketplace by 15% over the next four years.

But that amount might not make much difference to consumers with rising premium payments from the loss of the ACA’s enhanced tax credits, said Keith Mueller, director of the Rural Policy Research Institute.

“That’s not a lot of money,” Mueller said.

Three of the eight insurers on the state’s exchange, Nevada Health Link, offered the state plans during the open enrollment period.

Insurance companies plan to meet the lower premium cost requirement in Nevada by , which prompted opposition from insurance brokers in the state. In response, Nevada marketplace officials told state lawmakers in January that they will give a flat-fee reimbursement to brokers.

The public option has faced opposition among state leaders. In 2024, a state judge dismissed a lawsuit, brought by a Nevada state senator and a group that advocates for lower taxes, that challenged the public option law as unconstitutional. They have appealed to the state Supreme Court.

Federal Policy Impacts

Recent federal changes create more obstacles.

Nevada is consistently among the states with the of people who do not have health insurance coverage. Last year, in the state received the enhanced ACA tax credits, averaging $465 in savings per month, according to KFF, a health information nonprofit that includes ºÚÁϳԹÏÍø News.

But the enhanced tax credits expired at the end of the year, and it that lawmakers will bring them back. Nationwide ACA enrollment has decreased by so far this year, down from record-high enrollment of 24 million last year.

About 4 million people are expected to lose health coverage from the expiration of the tax credits, according to the . An additional 3 million are because of other policy changes affecting the marketplace.

, an associate research professor at the Center on Health Insurance Reforms at Georgetown University, said the changes to the ACA in the Republicans’ One Big Beautiful Bill Act, which President Donald Trump signed into law last summer, will make it more difficult for people to keep their coverage. These changes include more frequent enrollment paperwork to verify income and other personal information, a shortened enrollment window, and an end to automatic reenrollment.

In Nevada, the changes would amount to an losing coverage, according to KFF.

“All of that makes getting coverage on Nevada Health Link harder and more expensive than it would be otherwise,” Giovannelli said.

State officials projected ahead of open enrollment that about 35,000 people would purchase the public option plans. Of the 104,000 people who had purchased a plan on the state marketplace as of mid-January, 10,762 had enrolled in one of the public option plans, according to Nevada Health Link.

Katie Charleson, communications officer for the state health exchange, said the original enrollment estimate was based on market conditions before the recent increases in customers’ premium costs. She said that the public option plans gave people facing higher costs more choices.

“We expect enrollment in Battle Born State Plans to grow over time as awareness increases and as Nevadans continue seeking quality coverage options that help reduce costs,” Charleson said.

According to KFF, nationally the enhanced subsidies an average of $705 annually in 2024, and enrollees would save an estimated $1,016 in premium payments on average in 2026 if the subsidies were still in place. Without the subsidies, people enrolled in the ACA marketplace could be seeing their premium costs more than double.

Insights From Washington and Colorado

Washington and Colorado are not planning to alter their programs due to the expiration of the tax credits, according to government officials in those states.

Other states that had recently considered creating public options have backtracked. Minnesota officials a public option in 2024, citing funding concerns. Proposals to create public options in Maine and New Mexico also sputtered.

Washington initially saw meager enrollment in its Cascade Select public option plans; only 1% of state marketplace enrollees chose a public option plan in 2021. But that changed after lawmakers with at least one public option plan by 2023. Last year the state reported that 94,000 customers enrolled, accounting for 30% of all customers on the state marketplace. The public option plans were the lowest-premium silver plans in 31 of Washington’s 39 counties in 2024.

found that since Colorado implemented its public option, called the Colorado Option, coverage through the ACA marketplace has become more affordable for enrollees who received subsidies but more expensive for enrollees who did not.

Colorado requires all insurers offering coverage through its marketplace to include a public option that follows state guidelines. The state set premium reduction targets of 5% a year for three years beginning in 2023. Starting this year, premium costs are medical inflation.

Though the insurers offering the public option did not meet the premium reduction targets, enrollment in the Colorado Option has increased every year it has been available. Last year, the state saw record enrollment in its marketplace, with purchasing a public option plan.

Giovannelli said states are continuing to try to make health insurance more affordable and accessible, even if federal changes reduce the impact of those efforts.

“States are reacting and trying to continue to do right by their residents,” Giovannelli said, “but you can’t plug all those gaps.”

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