Massachusetts Faces Public Health Insurance Losses Amid Federal Budget Cuts

Federal policy changes under the 2024 budget reconciliation bill have led to significant reductions in public health insurance coverage for certain populations in Massachusetts, potentially affecting about 250,000 people. Notably, Deferred Action for Childhood Arrivals (DACA) recipients, numbering approximately 5,000 in Massachusetts, lost eligibility for marketplace coverage as of August 31, 2024. Additionally, starting January 1, 2026, over 34,000 legal immigrants with low income are expected to lose coverage under the ConnectorCare Plan Type 1, which currently offers low-cost health plans with minimal premiums and deductibles to immigrants not yet eligible for MassHealth Standard due to residency duration requirements.

Those losing ConnectorCare coverage will still have access to emergency care through MassHealth Limited and services offered by hospitals and community health centers under the state's Health Safety Net program. However, this safety net fund is operating with significant deficits, including a $107 million shortfall reported in 2023 and projected losses up to $290 million by the end of fiscal 2025. The Massachusetts Health and Hospital Association has warned of potential negative impacts on patient access and provider financial stability due to these coverage losses.

The state's Health Connector has also ended the special enrollment period for low-income individuals, restricting enrollment to open enrollment windows only. These changes align with federal efforts to reduce Medicaid and marketplace spending, with an estimated $1.5 trillion in reductions largely impacting Medicaid populations nationwide. Experts project millions fewer enrolled in Medicaid and health insurance exchanges over the coming decade due to these tightened eligibility rules, particularly for non-citizens.

Massachusetts officials highlight the challenge of rolling back nearly two decades of efforts toward near-universal coverage in the state. The loss of subsidies and insurance eligibility for low-income immigrants represents both a fiscal saving for the federal government and a substantial policy shift with implications for healthcare access among vulnerable populations. Stakeholders including hospitals are engaging with state leadership to explore opportunities to maintain a viable health safety net under these constrained conditions.

Regular updates on coverage changes and impacts are being provided by the Massachusetts Health Connector.