2025 Health Care Policy Reforms: A Review of State-Level Measures
TL/DR –
In 2025, states in the US enacted numerous laws to strengthen their healthcare systems, addressing issues such as high healthcare costs, increased consolidation in the sector, and increased private equity penetration. Key areas of focus included controlling healthcare prices, increasing oversight of major healthcare transactions, requiring public reporting on the ownership of healthcare entities, and strengthening the corporate practice of medicine (CPOM) doctrine. Notable actions included Vermont, Indiana, and Washington implementing reference-based price caps for healthcare providers; New Mexico requiring prior approval from a state entity for significant healthcare transactions; Indiana and Washington enhancing ownership transparency; and Oregon strengthening its CPOM doctrine.
Controlling Health Care Prices
In an attempt to control the escalating healthcare costs, states like Vermont, Indiana, and Washington have implemented reference-based price caps on healthcare providers in H1 2025. This policy sets a maximum limit on the prices hospitals can charge for medical services, often as a percentage of Medicare rates. In other words, these states have enacted new laws to strengthen the efficiency and affordability of their healthcare markets.
Successful Examples
Oregon and Montana have successfully used reference-based price caps to control healthcare spending, saving over $107 million and $47.8 million, respectively. Based on the analysis by the Center for Advancing Health Policy through Research at Brown University, the average state could save $150.2 million from implementing similar policies.
Policy Expansion
While previously restricted to state employee health plans and public option insurance plans, reference-based price caps have been expanded across all payers in Vermont and Indiana in 2025. Washington state has also established a price cap for hospitals through the state’s employee health plan.
Addressing Healthcare Market Consolidation
With increasing consolidation in the health care sector, states have turned to policy reform to address rising prices. New Mexico introduced a law requiring state approval for significant health care transactions. Maine implemented a temporary ban on private equity expansion in healthcare, while Colorado established new notice requirements for major healthcare transactions.
Enhancing Ownership Transparency
States like Indiana and Washington are introducing measures for increased transparency in the ownership structure of healthcare entities. Indiana has set up a healthcare provider registry while Washington is developing a plan to create an interactive registry of the healthcare landscape.
Strengthening Corporate Practice of Medicine
As private equity firms expand into the health care sector, states are exploring ways to reinforce prohibitions on the corporate practice of medicine (CPOM). Oregon has successfully passed a legislation restricting corporations’ ability to own medical practices, thereby strengthening the state’s CPOM doctrine.
Moving Forward
As states prepare for their 2026 legislative sessions, the reforms enacted in 2025 serve as a guide for strengthening their healthcare markets. With rising costs, increasing consolidation, and the growing influence of private equity, states will continue to face challenges in the years to come.
About The Center for Advancing Health Policy through Research
The Center for Advancing Health Policy through Research (CAHPR) aims to contribute toward understanding and developing policies that enhance affordability and value in US healthcare. The health economists and lawyers at CAHPR are available to provide technical assistance and economic analyses to state policymakers for effective health policy-making.
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