Massachusetts braces for ‘gut punch’ of health insurance costs if Congress fails to act

 

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Massachusetts braces for ‘gut punch’ of health insurance costs if Congress fails to act   September 26, 2025 By Chris Lisinski

Massachusetts is already bracing for significant health care disruptions stemming from Republicans’ sweeping tax bill that cuts Medicaid funding, and policymakers are worried that even more residents will soon feel added strain because of federal inaction.

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A pandemic-era tax credit that has helped millions of Americans pay for health insurance is set to expire at the end of the year. Many Democrats, joined by state marketplace administrators and activists, are mounting an all-out blitz in support of extending the Biden-era aid as the threat of a federal government shutdown fast approaches.

But Republicans who control Congress so far have not indicated they plan to extend the so-called “enhanced premium tax credits,” at least not as part of a funding bill to keep government open past September 30. That deadline might be the last, best chance for supporters to get the tax credits renewed.

Without action, Massachusetts health care leaders and advocates warn the impacts could be dire. Hundreds of thousands of Bay Staters could face higher health insurance premiums next year. Some might need to pay more than three times as much to maintain roughly the same level of coverage. State budget-writers could wind up with a quarter-billion-dollar headache, too.

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“This feels like it would be a real gut punch to working families across the state if this was to be rolled back,” said Alex Sheff, senior director of policy and government relations for the advocacy group Health Care for All.

Officials at the Massachusetts Health Connector, the state’s health insurance marketplace, estimate that more than 337,000 residents will experience higher costs if Congress allows the credits to expire. The annual tax credit loss in Massachusetts for residents would amount to $425 million, or an average of $1,364 per person, according to a fact sheet the Connector began circulating this month as its leaders pressed for action.

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The federal tax credits not only helped Massachusetts residents afford health care, but they shifted some of the financial burden from the state, freeing up funding to expand subsidies to a larger swath of people who need help. If policymakers want to keep the lowest-cost plans available to Massachusetts consumers at roughly similar rates, they might need to kick in hundreds of millions more in state funding to make up for lost federal dollars.

State officials have spent recent weeks notifying residents that they might lose significant subsidies, and face greater expenses, if the program sunsets.

“Letting people know the prospect that their ability to continue to afford coverage is in question as a result of congressional inaction so far is a worrying place to be in as a marketplace,” said Connector executive director Audrey Morse Gasteier. “The clock is really ticking.”

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More Context Medicaid enrollment drops by 383,000 from COVID high (June 2024) With Democrats united, Healey signs $56b budget (August 2023)

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