New Law Mandates State Medicaid Coverage for Lung Cancer Biomarker Testing Starting January 2027

The Improving Medicaid Precision and Cancer Test Act of 2025 is short, sweet, and focused on one major change: making advanced lung cancer testing a mandatory benefit for everyone on Medicaid. Think of this as a significant upgrade to the baseline healthcare package for millions of Americans.

The Upgrade: What’s Being Added?

Starting on January 1, 2027, this bill requires every state Medicaid program to cover “lung cancer biomarker testing.” This isn't just a standard X-ray or biopsy; biomarker testing is a type of precision medicine that looks at the specific genetic makeup of a tumor. Why does this matter? Because knowing the biomarkers helps doctors pick the most effective, personalized treatment plan, which often leads to better outcomes than a one-size-fits-all approach.

The bill implements this change by amending three different sections of Title XIX of the Social Security Act (Sections 1902(a)(10)(A), 1905(a), and 1937(b)(5)). These amendments essentially make biomarker testing a required service that states cannot opt out of or limit under their standard benefit packages. For a Medicaid recipient, this means the difference between having access to cutting-edge diagnostics and being stuck with older, less precise methods.

Real-World Impact: Precision Medicine for Everyone

For the millions of people who rely on Medicaid—including low-income workers, seniors, and people with disabilities—this is a huge win for equitable access. Lung cancer is often diagnosed late, and personalized treatments based on biomarker testing can be critical for survival and quality of life. Before this mandate, coverage for this testing could be hit or miss depending on which state you lived in.

Imagine a construction worker, let’s call her Maria, who is diagnosed with lung cancer. If she lives in a state that didn't previously cover biomarker testing, her treatment options might have been limited to standard chemotherapy. Under this new mandate, Maria's doctor can conduct the testing, find a specific mutation, and prescribe a targeted therapy pill that might have fewer side effects and be more effective than traditional methods. This bill ensures Maria gets the same diagnostic tools as someone with top-tier private insurance.

The Cost Conversation

While the benefit to patients is clear, the financial burden shifts directly to state Medicaid budgets. Mandating a new, often expensive, advanced testing service means states will need to find the funding to cover these costs starting in 2027. For taxpayers and state finance departments, this translates into increased mandatory spending. The economic burden is medium because while the testing is costly, the long-term benefit of more effective, personalized treatment may offset some costs associated with ineffective, prolonged treatments down the road. However, the initial outlay is non-negotiable for states once the law takes effect.