Congress opens door for states to abandon federal health programs
H.R. 4406 — State-Based Universal Health Care Act of 2025 · Filed by Ro Khanna (D-CA) · 35 cosponsors · Introduced Jul 15, 2025 · Referred to committee
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What it does
This bill creates a federal waiver process allowing states to opt out of major federal health programs (Medicare, Medicaid, ACA exchanges, TRICARE, federal employee health benefits) and instead implement their own universal health care plans, provided they cover at least 95% of residents with benefits at least as comprehensive as the federal programs they replace. The federal government would pass through to the state the funding that would have been spent on those programs, adjusted for inflation and caseload growth, allowing states to design and administer their own health systems.
Why we flagged it
The bill's core function is structural: it redistributes authority over health coverage from federal to state level by creating a waiver mechanism. It is not primarily a cost-control or benefit-expansion bill, but rather a governance architecture that enables states to experiment with universal models.
What the text implies
- States that fail to achieve 95% coverage after 5 years face waiver termination, potentially leaving residents without coverage mid-program if the state cannot quickly revert to federal programs.
- The bill allows states to restrict supplemental private insurance, which may reduce consumer choice and could create political backlash if state plans are perceived as inadequate.
The full analysis lists 5 implications of this text.
Who stands to gain
State governments (receive federal funding pass-through); Health care providers in states with universal plans (potentially higher negotiated rates); Labor unions representing health care workers (panel representation and potential wage/benefit gains