Here are the state healthcare laws taking effect in 2026

Modern Healthcare – Monday, January 5, 2026
By Hayley DeSilva

Healthcare companies are going to have to digest new state laws taking effect this year and many of them are related to prior authorization and private equity’s role in the industry.

Here are some of the laws affecting healthcare in 2026. Unless otherwise noted, the laws take effect Jan. 1.

Alabama

Providers who have a prior authorization approval rating of 90% or higher for a healthcare service will be exempt from having to file requests for that service with insurers.

Arizona

As of June 30, Arizona insurers cannot deny claims or prior authorization for services submitted by providers for medical services without the denial being individually reviewed by a medical director or a physician hired by the insurance company to review denials and prior authorization requests.

California

The state capped insulin drug prices at $35 a month for most individuals with state-regulated health plans and prohibited step therapy requirements for insulin coverage. Step therapy requires a patient to try cheaper forms of treatment before moving to more expensive types.

Private equity laws were tightened for healthcare organizations. Private equity firms and hedge funds looking to work with a healthcare organization in any capacity will be required to alert the California Office of Healthcare Affordability, detailing any partnership, merger, acquisition or transfer of operations plans. They also will be required to report the financial terms, facilities and other assets involved.

The law also prohibits private equity firms from making decisions on several matters, including medical testing, hiring of medical staff, referral or consultation needs, how many patients are seen per day and parameters of agreements with third-party insurers.

Florida

Healthcare facilities must refund patients for any overpayments made that the facility intends to receive reimbursement for within 30 days of recognizing the overpayment.

Additionally, state group health plans must provide coverage for fertility services for cancer patients whose treatment may cause infertility.

Illinois

Insurers must cap out-of-pocket costs for prescription inhalers on any policies renewed or issued in 2026 and are also required to cover brand-name drugs when generic options are unavailable.

Maine

A one-year moratorium that expires June 30 bans private equity companies or real estate investment trusts from acquiring or increasing their ownership in hospitals.

Montana

Several laws related to prior authorizations for chronic conditions were revised:

• Certifications for treatment of a chronic condition will remain valid for a year, unless a shorter duration is warranted by the Food and Drug Administration.
• Insurers are required to honor certifications for services for at least three months if a member switches to a different health plan, provided the services are covered under the new plan.
• Retroactive denials by insurers were prohibited.

Nebraska

All providers are required to use an approved, uniform prior authorization request form. Insurers are required to only accept the forms.

North Dakota

Several laws regarding prior authorization were updated:

• Prior authorization review organizations must make requirements and restrictions on prior authorizations publicly available. Organizations also must give providers written notice of any changes to requirements 60 days before they are implemented.
• Any determinations like denials or appeals for denials must be reviewed by a medical director. A review organization may not require require prior authorization for treatment of an emergency medical condition or for medication-assisted treatment of opioid-use disorder.
• Review organization are not allowed to revoke approval if care is delivered within 45 days.

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