With hospitals at risk, Mass. eyes lifeline for broke insurer covering 460K public employees

Amid fears of “serious financial consequences,” Massachusetts is working to create a lifeline for a Massachusetts agency that oversees health insurance for 460,000 public employees, retirees and their dependents after it could not continue to pay providers.

In January, state Group Insurance Commission (GIC) Executive Director Matthew Veno had flagged the agency’s budget shortfalls as a concern.

“This is the largest variance that we’ve seen in at least a decade, and this is consistent across all of our plans, and is driven primarily by rising provider prices and a couple of other topics,” he said at the time. “We don’t know where this is going to head. My concern is that it is a persistent and steady trend going forward.”

Then in April, Veno said rising provider prices and increased utilization of prescription benefits, including for GLP-1 weight loss drugs, had caused the commission to run an average $20 million monthly deficit this fiscal year.

Massachusetts Health & Hospital Association (MHA) said it was “unacceptable” for the insurance agency to have a lack of backup options and claims the disruption in payments “will undoubtedly result in serious financial consequences.”

Mercy Medical Center in Springfield said it “is not in a financial position to absorb budget shortfalls of the state Massachusetts Group Insurance Commission.”

“While we appreciate the financial situation of the GIC, we join them in advocating for funding to resolve its budget deficiency that will not further exacerbate the financial condition of healthcare providers,” the statement continued.

But the Massachusetts Legislature didn’t act before GIC officially ran out of money on Monday. All claims have remained pending since then.

The commission had been counting on a $237 million appropriation request before the Legislature.

The appropriation was the largest single request in a $756 million short-term spending bill Gov. Maura Healey filed in early April.

However, in an email sent to providers earlier this month, the GIC warned that it “does not know how soon the legislature will pass the bill and when the GIC will receive the requested funds.”

The claims will remain pending until GIC receives the additional funds or until July 1.

This week, Massachusetts began moving forward on the requested funds.

The House advanced a $240 supplemental budget for the agency on Monday. And the Senate passed it on Thursday.

“Ensuring that the hundreds of thousands of public employees and their loved ones have access to health insurance is one of our most important responsibilities,” said Senate President Karen E. Spilka, D-Middlesex/Norfolk.

Now it is set for Healey’s desk.

But this isn’t unique to GIC.

“The Group Insurance Commission is facing a challenge that is not unique to any insurer, as pharmaceutical usage is going up and the costs of drugs are rising at an unsustainable rate,” said Senator Cindy F. Friedman, D-4th Middlesex, the Senate’s chair of the Legislature’s Joint Committee on Health Care Financing.

“The Senate is actively working on measures to address this larger issue, as well as other cost drivers throughout the health care system, to relieve the pressure on insurers and the premiums that residents in the Commonwealth face,” the Arlington lawmaker continued. “As we work towards the end goal of stabilizing health care costs, this supplemental funding for the GIC will ensure that our state employees stay covered and healthy.”

©2025 Advance Local Media LLC. Visit masslive.com. Distributed by Tribune Content Agency, LLC.