Healey taps $250M to offset rising health insurance premiums

BOSTON — The Healey administration is pumping another $250 million into the state-subsidized health care system to help offset the impact of now expired federal tax credits, which have driven up premiums for many people insured through the federal health care exchange.

On Thursday, Gov. Maura Healey and other state officials said they are moving ahead with plans to increase spending on the ConnectorCare program by $250 million, for a total of $600 million this fiscal year.

Healey called it the “largest state investment in the country” and said it means about 270,000 people enrolled in ConnectorCare, whose incomes are below 400% of the federal poverty level, will “see little to no premium increases” because of the expiring federal credits.

“Massachusetts families cannot afford President Trump’s drastic increases to their health insurance premiums,” Healey, a Democrat, said Thursday. “While Washington raises costs, we are working hard to lower them — it’s why we capped health care deductibles and co-pays for the first time, as well as the cost of insulin and inhalers.”

“We will continue to do all we can to make health care more affordable in this state,” she said.

The Healey administration said the tranche of new funding will also help lower other out-of-pocket costs such as co-pays and deductibles for ConnectorCare recipients. The funding comes from the Commonwealth Care Trust Fund, which is funded in part by health care premiums, tobacco tax collections and other sources of revenue.

“This continued commitment means hundreds of thousands of Massachusetts residents can continue to afford coverage that’s there for them when they need it, keeping them healthy and financially secure,” Audrey Morse Gasteier, the connector’s executive director, said in remarks Thursday.

Health insurance premiums for an estimated 24 million Americans who get their coverage through the Affordable Care Act, also known as Obamacare, are due to rise by double digits this year after Congress failed to take action before the end of 2025 to extend the subsidies.

More than 328,000 Massachusetts residents who get their health insurance through the federal exchange had received notices about their premiums doubling — in some cases tripling — this because the tax credits approved during the COVID-19 pandemic are expiring, according to state health officials.

On Thursday, the U.S. House was poised to pass bipartisan legislation extending contentious ObamaCare tax credits for three years. The bill would still need to pass the Senate before landing on Trump’s desk for consideration.

Healey had previously urged Republicans and President Trump to support the Democratic plan earlier this week, warning that people will go without health care coverage if the subsidies aren’t extended.

Extending the Obamacare subsidies was the Democrats’ principal objection during the 43-day shutdown — the longest in U.S. history.

Republicans say the COVID-related subsidies are no longer needed because the pandemic is over, and argue they create opportunities for waste, fraud and abuse while driving up the overall cost of health care premiums. They’ve pointed out that even though the subsidies are reduced, they won’t go away.

The nonpartisan Congressional Budget Office estimated a Democratic proposal to extend the tax credits for another three years would add nearly $83 billion to the federal deficit over the next decade. It would also increase the number of people with subsidized health insurance by 8.5 million by 2029, the office said.

Health care coverage is one of the state’s biggest expenses and its efforts to ensure people will retain health care coverage are likely to increase those costs for taxpayers.

The cost of MassHealth — the state’s Medicaid program which serves more than 2 million or roughly one in every three people — has doubled in the past decade and now accounts for nearly 40% of overall spending.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.

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