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Medicaid Trends in FY 2023 State Budgets

Faridat Animashaun
November 1, 2022

Common themes in fiscal year (FY) 2023 state Medicaid budgets include new and expanded initiatives to improve health equity and reduce health disparities, maintain telehealth access and quality, and improve the range of covered services, according to a recent Kaiser Family Foundation survey.

The survey highlights the COVID-19 pandemic’s effect on both emerging trends in state Medicaid policy priorities and longstanding priorities exacerbated by the pandemic.

Health Equity

Multiple states plan to fund strategies to improve Medicaid race, ethnicity, and language (REL) data collection and provide financial incentives tied to health equity-related performance goals. For example:

  • Massachusetts, through its approved MassHealth Section 1115 demonstration waiver, will financially incent accountable care organizations (ACOs) and ACO-participating hospitals to provide complete data on race, ethnicity, language, disability, sexual orientation and gender identity (RELD SOGI) starting in FY 2023.
  • In FY 2023, Connecticut plans to launch a maternity payment bundle that ties financial incentives to health equity outcomes. The state will include doulas and breastfeeding supports to remedy disparities in maternal and birth outcomes for Black people and people of color, as well as those with substance use disorders (SUD).


Many states are considering permanent telehealth policies and weighing expanded access against quality, equity, program integrity, and other concerns. For example:

  • New York has requested a Section 1115 waiver that includes funding for telehealth infrastructure, including supplying tablets to providers and enrollees who lack access to technology necessary for telehealth services.
  • Ohio expanded its telehealth coverage policy to include pregnancy education, diabetes management, and behavioral health services.

Eighteen states reported that FY 2023 telehealth policy changes were undetermined, with common areas of consideration including allowable services, modalities, payment parity, and other guardrails. For example, Delaware aims to keep most current flexible policies in place but is considering requiring an in-person component for certain services.

Enhanced Benefits and Services

States continue to focus on behavioral health through the introduction of new and expanded services for FY 2023. California, Colorado, Kansas, Maine, Maryland, Montana, Nevada, Ohio, Oregon, and South Carolina are expanding coverage of crisis services, which aim to connect Medicaid beneficiaries experiencing behavioral health crises to appropriate community-based care. Further, California and Nevada expanded Medicaid benefits to treat SUD.

Several states are adding coverage of doula services and investing or expanding home visiting programs that aim to keep children healthy and promote self-sufficiency. Other examples of expanded pregnancy and postpartum services include:

  • Illinois’ plan to expand services provided by certified lactation counselors and consultants, public health nurses, and medical caseworkers.
  • West Virginia‘s Drug Free Moms and Babies Program for pregnant and postpartum individuals with SUD with a targeted case management benefit.
  • Maine and Maryland‘s expanded Maternal Opioid Misuse (MOM) models for pregnant and postpartum patients with opioid use disorder.

Further, recently approved Section 1115 waivers in Arizona, Massachusetts, and Oregon allow the states to provide evidence-based health-related social needs (HRSNs) services to certain high-need enrollees, when clinically appropriate, to mitigate food insecurity or housing instability.

Contact Director of Policy Rob Nelb, MPH, at or 202.585.0127 with questions.

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