Health coverage, cost trends serving double whammy

With hundreds of thousands of Bay Staters expected to lose their health coverage due to federal policy changes, industry leaders and state officials mapped out broad strategies to combat a looming surge in uninsured residents.

Around 300,000 residents will lose coverage through MassHealth and the Massachusetts Health Connector, said Audrey Shelto, CEO of the Blue Cross Blue Shield of Massachusetts Foundation. New Medicaid work requirements and more frequent redetermination requirements that will take effect in 2027 under the One Big Beautiful Bill Act are “projected to double the rate of uninsurance” in the commonwealth, Shelto said.

“This law makes it unbelievably harder to qualify for MassHealth, to get enrolled in MassHealth and to stay enrolled in MassHealth,” Shelto said at the Health Policy Commission’s annual hearing on cost trends, which this year veered into discussion of projected coverage trends.

Insights shared from providers, health system leaders, insurers, state agencies and other stakeholders help the HPC establish a yearly health care spending growth benchmark. The state in recent years has far eclipsed the metric, putting pressure on individual, business and government health care payers. The benchmark was set at 3.6% for 2026, after the growth rate of total health care expenditures rose by 8.6% from 2022 to 2023.

Massachusetts now posts “the highest family health insurance premiums in the country,” and “the average annual cost of health care for a family exceeded $31,000, including out-of-pocket spending” in 2024, according to a letter in the hearing program from HPC Executive Director David Seltz and Board Chair Deborah Devaux. The average annual cost sharing per person increased from $849 in 2019 to $1,049 in 2023. The volume of residents paying $5,000 or more in annual cost sharing also doubled from 2019 to 2023.

Seltz said employers are shifting costs onto their workers. While one in five people with commercial coverage was enrolled in a high-deductible plan in 2014, that figure approached 50% in 2023, he said.

“Survey results tell us that patients and residents who have high-deductible health plans are much more likely to have medical debt, and they’re much more likely to report having gone to the emergency department for a condition that doesn’t need emergency department level of care,” Seltz said.

Changes

Under the One Big Beautiful Bill Act, individuals who are ages 19-64 and those enrolled through the Affordable Care Act expansion group will need to work or participate in other qualifying activities for at least 80 hours each month to remain eligible for Medicaid coverage, according to KFF. There are exemptions, including for individuals who are medically frail.

States must also redetermine eligibility every six months, as opposed to the current yearly requirement, under the new federal law. Massachusetts is expected to lose $3.5 billion annually once all components of the law take effect, Shelto said.

“The state is going to have to make some really, really hard decisions,” Shelto said. “I’m sure that some of the decisions will be, what holes can the state close? But some of the decisions are also going to have to be who gets covered? What do they get for coverage? What do providers get paid?”

Mike Levine, undersecretary for MassHealth, described “job number one” as ensuring that as many members retain their coverage as possible amid the federal changes. He also offered a four-pronged approach as MassHealth handles new work requirements, including ascertaining which members do not need to comply with those rules, automatically determining which members already comply with the requirements, conducting outreach to individuals and communities who must take action to stay on the MassHealth rolls, and helping to connect members with qualifying activities in order for them to remain eligible.

“I’ll give you an interesting statistic from our redetermination efforts two years ago: We managed to get our auto-renewal rates up by over 20 percentage points just by doing a better job of data matching and linking people to income records, so that they never had to fill out a form or get an envelope,” Levine said. “They just got a piece of mail that said, ‘You’re good – we’ll see you in a year.’ We want to do that with as many people as possible for work requirements and take advantage of data sources, your income, higher education, volunteer association, you name it, so that people don’t have to lift a finger.”

Michael Curry, CEO of the Massachusetts League of Community Health Centers, said the looming wave of uninsured patients is “deeply concerning to us.” Around 43% of patients at health centers are on Medicaid, and the centers also serve 66% of the state’s uninsured population, Curry said.

Massachusetts is also grappling with new guidance surrounding the MassHealth Section 1115 Demonstration Waiver, as officials work on extending it beyond 2027. The waiver gives Massachusetts flexibility over Medicaid policies, and over designing and improving programs, according to a state webpage.

“When we get ready to negotiate our 1115 waiver, we can no longer access the federal workforce programs and initiatives that we go into this waiver with for any new program,” Curry said. “So when we as community health centers rely heavily on our Medicaid program — our 1115 efforts, I should say — to really be innovative about how do we recruit, retain our workforce and particularly diverse workforce in the commonwealth, that decision concerns us.”

Federal immigration policies, particularly lapsed or revoked work permits, are also straining the health care workforce. Levine said the loss of work authorizations is causing a “significant impact” for long-term care services and supports, including nursing homes and community-based care.

Perennial issue

While Wednesday’s hearing revolved heavily around the federal health care landscape, affordability and access challenges pre-date the Trump administration, said Attorney General Andrea Campbell.

“Now with a federal government that is possibly making premiums higher under the ACA, making it more difficult for folks to access food, the innovation must continue — not only because it will then demonstrate to others in the country how to do it, but if we were able to revisit the benchmark issue and also come up with some legislative solutions and other solutions, we can get ahead of the increases, we can get ahead of the accessibility issues,” Campbell told reporters.

Asked to clarify what legislative or benchmark interventions entail, Campbell said her office is focused on monitoring the entry of new for-profit entities into Massachusetts to prevent another situation like the Steward Health Care bankruptcy crisis. The AG also expressed an openness to working with Beacon Hill and the Health Policy Commission.

“They’re not all within our wheelhouse, but we do have thoughts and ideas,” Campbell said. “And I think it’s time for a more robust conversation, given that the federal government is nowhere to be found in helping us reduce costs and reduce accessibility issues.”

U.S. House Speaker Mike Johnson and other congressional Republicans have said the Medicaid work requirements are aimed at eliminating “waste, fraud and abuse.”

“[Y]ou eliminate fraud, waste and abuse, you bring in work requirements, and you tighten up the program, and you can find a lot of savings,” Johnson said in April, as he noted the policy change will ensure “illegal aliens” are not receiving Medicaid coverage.

“The whole idea is that we’re trying to preserve the program,” Johnson said.

Residents enrolled in plans through the Massachusetts Health Connector will experience the most immediate disruptions tied to the federal government, said Executive Director Audrey Morse Gasteier.

In January, about 37,000 noncitizens who are lawfully present here will lose access to heavily subsidized ConnectorCare plans under a policy change in the One Big Beautiful Bill Act. Thousands of other Bay Staters are also facing steep premium increases, though they could see relief if Congress decides to extend enhanced premium tax credits that are set to expire at the end of the year.

“We have been inundated in our call center,” said Morse Gasteier, as she reflected on the first 12 days of open enrollment. “We are hearing from people in duress. We have seen an uptick in threats of self-harm. The degree of duress that is out there as folks contemplate losses of subsidy and these really striking premium increases is profound.”