4 Healthcare Laws, Rules Taking Effect July 1st
From hospital staffing enforcement to pharmacy pricing and prior authorization reform, several healthcare-related laws are set to take effect July 1st.
Here are four new rules and laws to know:
1. Federal student loan caps for PA and CRNA programs take effect. The Education Department on April 30 finalized the Reimagining and Improving Student Education rule, carrying out provisions from the Working Families Tax Cuts Act signed into law July 4, 2025. Most changes take effect July 1. The rule caps annual federal borrowing at $20,500 for graduate students and $50,000 for professional students. Under the rule’s framework, some healthcare fields — including physician assistants and certain advanced practice nursing pathways — are treated as graduate programs rather than professional programs, limiting annual federal loans for students in those programs to $20,500 beginning July 1. Industry organizations have said the classification changes could restrict access to education and worsen workforce shortages.
2. Washington begins penalizing hospitals for missed meal and rest breaks. Starting July 1, the Washington State Department of Labor and Industries will have the authority to issue penalties for hospitals that exceed the threshold for missed meal and rest periods as part of SB 5236, which was passed in 2023. The penalties range from $5,000 to $20,000, depending on the size of the hospital. Covered healthcare workers are required to have at least one break for a 4-hour shift, two for an 8-10-hour shift, and three for a 12-hour shift. Employees cannot work more than five hours without a meal period, according to the department.
3. Florida tightens PBM rules. Florida’s Drug Prices and Coverage Act, signed by Gov. Ron DeSantis on March 24, takes effect July 1. The law adds two new prohibited practices for pharmacy benefit managers: PBMs may not restrict a pharmacy or pharmacist from declining to dispense a drug if the reimbursement rate is less than the pharmacy’s actual acquisition cost, and may not reimburse a nonaffiliated pharmacy or pharmacist less than an affiliated pharmacy or pharmacist. The law also requires PBM contracts to allow pharmacies to submit consolidated administrative appeals representing multiple claims sharing the same drug, day supply and calendar month of service.
4. Iowa restricts AI use in prior authorization decisions. Iowa’s House File 2635, signed by Gov. Kim Reynolds on May 13, takes effect July 1. The law prohibits utilization review organizations from using an artificial intelligence-based algorithm or system as the sole basis for a decision to deny, delay or downgrade a prior authorization request based on medical necessity. It also prohibits health carriers from penalizing or reducing reimbursement for a health care provider based on that provider’s referral to, or affiliation with, an out-of-network provider, and bars carriers from enforcing or offering a contract amendment without providing the provider an opportunity for negotiation.
The Bright Spots in Michigan’s Medicaid Expansion: 5 Notes for Hospitals
More than a decade after Michigan expanded Medicaid through the Healthy Michigan Plan, a University of Michigan report suggests the policy provides significant benefits to patients, as well as for hospitals, primary care providers and the broader healthcare safety net.
The findings in the June 9 report come as states prepare to implement federal Medicaid work requirements, including cost-sharing provisions for some enrollees. Researchers said Michigan’s experience offers lessons for hospital leaders nationwide on coverage expansion, uncompensated care and long-term financial sustainability.
Five things to know:
1. Medicaid expansion significantly reduced uncompensated care. One of the report’s most consequential findings for health systems is that Medicaid expansion cut hospital uncompensated care in Michigan by roughly half and kept it at lower levels through 2021. Researchers also found that hospitals in states that did not expand Medicaid did not experience similar reductions in uncompensated care. The proportion of hospitalizations involving uninsured, self-pay patients fell 74% in Michigan between 2013 and 2015, compared with an 11% decline in non-expansion states.
2. Coverage gains translated into stronger hospital finances. The report found Medicaid expansion drove a sustained decline in the state’s uninsured population, helping reduce financial pressure on hospitals and other providers. Michigan’s uninsured rate fell to 6.7% in 2022, the lowest level recorded during the study period. Researchers found that reduced uninsurance contributed to lower charity care costs and improved financial stability across the healthcare system.
3. Medicaid expansion strengthened the healthcare safety net. Researchers said expanded coverage helped sustain hospitals, clinics and community health centers that serve vulnerable populations. The report also concluded that Medicaid expansion helped Michigan’s healthcare system weather the COVID-19 pandemic by providing coverage to residents who lost jobs and employer-sponsored insurance. Safety-net providers were better positioned to care for patients with COVID-19 and substance use disorders because more residents had coverage.
4. Primary care use increased while emergency department utilization declined. The report found Medicaid expansion increased access to primary care and preventive services while reducing avoidable emergency department use. Michigan primary care practices reported expanding same-day appointments, after-hours access and care management programs after expansion took effect. Researchers also found emergency department utilization declined among enrollees with chronic conditions, particularly those who established relationships with primary care providers.
5. New Medicaid cost-sharing requirements may create challenges. While the report found Medicaid expansion broadly successful, researchers raised concerns about cost-sharing provisions, including copays and premiums. Michigan’s experience showed many enrollees did not fully understand payment requirements or available incentives. Researchers recommended that states simplify cost-sharing systems and focus copays on services policymakers are trying to discourage, such as nonurgent emergency department visits. They also warned that work requirement policies increased administrative costs for Medicaid health plans before Michigan ultimately abandoned the program.
The report concluded that Medicaid expansion has become a critical component of Michigan’s healthcare system and safety net, supporting both patient health and provider financial stability over the past decade. As policymakers debate future Medicaid changes, researchers said Michigan’s experience offers a roadmap for other states seeking to balance coverage expansion, hospital sustainability and healthcare access.
