MassHealth warns of big coverage, funding losses under GOP plans

The U.S. Capitol Building in Washington, D.C. AP
Published: 05-15-2025 3:58 PM |
BOSTON — A key piece of a federal spending cut and tax relief plan that’s on the move in Washington could result in Massachusetts losing more than $1 billion annually and hundreds of thousands of Bay Staters losing health coverage, according to the Healey administration.
The U.S. House Energy and Commerce Committee on Wednesday advanced its share of a legislative package featuring hundreds of billions of dollars in spending cuts, mostly to Medicaid, as well as significant reforms to policy areas such as artificial intelligence and climate investments.
A MassHealth official who provided information on background said Wednesday that a high-level assessment of the proposal found it could cut federal dollars to Massachusetts by more than $1 billion annually. It could also take health care coverage away from “hundreds of thousands” of Massachusetts residents, according to the official.
That estimate assesses only the portion of the plan that was before the U.S. House Energy and Commerce Committee. The figures do not take into account other proposals that advanced through different panels and could become part of a larger bill.
Most cuts would hit in federal fiscal year 2027, though some others could take effect sooner depending on how quickly federal agencies promulgate rules, according to MassHealth.
Stressing that there’s still uncertainty over how to interpret some of the language, the Healey administration said two provisions in the Energy and Commerce Committee bill might have more immediate impacts.
One would lower the limit on allowable state directed payments, which are state requirements for managed care organizations to pay providers specific rates or to implement rate increases.
MassHealth said if the bill blocks renewal of Massachusetts’s existing state directed payments, so-called safety net providers could sustain cuts of hundreds of millions of dollars annually.
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The other specific policy the official flagged deals with provider taxes, or fees that states can levy on health care to help cover their share of Medicaid costs. The MassHealth official said the bill as drafted would require Massachusetts to cease collecting its managed care organization, or payor, assessment, leading to a loss of $625 million in revenue per year.
That assessment helps fund the health safety net, behavioral health initiatives, child vaccination efforts, the Center for Health Information Analysis, the Health Policy Commission and more, MassHealth said. State government could try to modify its existing waiver to comply with the proposed rule, but the official said that would still lead to significant reductions in the assessments collected, plus require a statutory change and potentially new federal approval.
House Republicans have said their proposal would slash wasteful spending and empower renewal of President Donald Trump’s tax cuts that are set to expire at the end of the year.
“When so many Americans who are truly in need rely on Medicaid for life-saving services, Washington can’t afford to undermine the program further by subsidizing capable adults who choose not to work,” U.S. Rep. Brett Guthrie of Kentucky, a Republican who chairs the House Energy and Commerce Committee, wrote in an op-ed this week.
MassHealth, which combines Medicaid and the Children’s Health Insurance Program under one umbrella, provides no-cost coverage to more than 2 million Bay Staters.
The program is the biggest area of spending in the annual state budget. The Massachusetts Taxpayers Foundation projected MassHealth spending will surpass $21.5 billion in fiscal 2025, with $13.3 billion reimbursed by the federal government.
It’s still not clear if the changes embraced by House Republicans will become law. Republican Sen. Josh Hawley of Missouri said Wednesday he would not support the bill, warning that it would “cut health care for the working poor,” The New York Times reported.
Any cut to federal Medicaid funding could force Beacon Hill’s budget-writers to fill the gap with state dollars, trim services or reduce eligibility.
Gov. Maura Healey told WBUR’s “Morning Edition” this week that “there’s no way that state budgets can make up for the kinds of cuts the Trump administration is looking to push through through Republicans in Congress.”
“If we don’t [speak up] and there are those cuts and cuts on the order that House Republicans are talking about, people are going to die, kids are going to die, infants are going to die,” Healey told WBUR.