Certificate of need (CON) laws were originally created with the intention of controlling health care costs and preventing unnecessary duplication of services. In practice, however, these laws often function as barriers to competition by requiring new providers or expanding facilities to obtain government approval before offering additional services. In many cases, existing hospitals and providers are allowed to weigh in during the approval process, effectively giving competitors influence over whether new options can enter the market.
During the 2026 legislative session, Iowa leaders took major steps to reduce the burdens imposed by CON laws in our state. The need for this legislation has been clear for years, and momentum has been building across the country lately.
A recent study from the Cato Institute examined access to rural health care in states with CON laws and in states without them. The research found that, by and large, states without CON laws had more hospitals in rural communities than states with CON requirements in place. And while Iowa had more rural hospitals per 100,000 residents than many other CON states, it still trailed neighboring states like Kansas and South Dakota, where CON laws are not in effect.
https://www.cato.org/blog/con-laws-hurt-rural-counties-most
This year, Iowa took significant steps to reform its CON system through House File 2635. As our friends and partners at Pacific Legal Foundation noted, the reforms raised the financial thresholds that trigger CON review, narrowed the types of projects subject to review, removed certain “efficiency” requirements, and exempted additional projects from the approval process altogether. These changes should make it easier for physicians, clinics, and health care providers to expand services and respond more quickly to patient needs.
For a rural state like Iowa, the reforms are especially meaningful. Smaller communities often struggle to attract new providers and maintain access to specialized services. Requiring providers to navigate lengthy approval processes can discourage investment and innovation in exactly the areas that need more health care options. By reducing regulatory barriers, Iowa lawmakers signaled a shift toward a more competitive and flexible health care system that prioritizes patient access and affordability over government-managed market control.
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