BOSTON — With enhanced federal health subsidies now expired, Beacon Hill leaders on Thursday endorsed a one-year plan to tap $250 million from a state trust fund to provide relief to a quarter-million middle- and low-income residents.
Senate President Karen Spilka and House Health Care Financing Committee Chair John Lawn joined Gov. Maura Healey to promote the administration’s decision to draw $250 million from the Commonwealth Care Trust Fund to stabilize ConnectorCare premiums for about 270,000 enrollees earning under 400% of the federal poverty level, describing the move as a necessary but temporary response to congressional inaction.
“We are standing today on the side of Massachusetts residents, and we are standing on the side of health care, affordability and access,” Spilka said. She contrasted the action with Washington not extending enhanced Affordable Care Act premium tax credits, saying Massachusetts leaders “promise to continue to work together and collaborate together to do what we can to protect our residents and defend our Massachusetts values.”
Lawn framed the $250 million as a concrete intervention in health care affordability.
“This $250 million increase in interconnected care is not symbolic. It is real relief for real families who depend on affordable coverage to stay healthy and financially stable,” he said, adding that without such intervention, rising premiums would lead to coverage losses, worse health outcomes and higher costs across the system.
The funding comes from the Commonwealth Care Trust Fund, an account created by the Legislature to support subsidized coverage through the Health Connector. Administration and Finance Secretary Matthew Gorzkowicz said the fund is supported by multiple revenue streams and is expected to take in about $650 million this year.
“There are a number of revenue sources that contribute to that,” Gorzkowicz said, citing cigarette taxes, individual mandate penalties, employer assessments through the Employer Medical Assistance Contribution, and periodic transfers from the state’s General Fund.
He said cigarette tax revenue contributes roughly $65 million to $70 million annually, employer penalties about $40 million, with revenue also coming from EMAC and state appropriations, with Medicaid federal financial participation. Gorzkowicz said there are not contributions from the General Fund every year. A&F officials did not return a request for information about the breakdown of contributions into the fund in time for publication.
An A&F spokesperson said that drawing from the fund to support ConnectorCare in 2026 will not require employers to increase their contributions.
While Healey has spent months publicly warning that Massachusetts could not fully backfill the loss of federal subsidies, she said Thursday that the trust fund represents a limited but appropriate mechanism to address the problem.
“The extent of the cuts are so widespread, there are certain instances where we may have an existing vehicle to help address some of that,” Healey said.
The administration was also clear that the move is temporary. Healey said the $250 million commitment is “a one-year plan right now,” with future funding dependent on federal action and upcoming negotiations.
If Congress were to reinstate the enhanced tax credits, she said the system would revert to its prior structure, with the federal government again picking up a larger share of the subsidy costs.
That one-year horizon underscores a tension in the administration’s response: Healey has repeatedly warned that the expiration of enhanced federal tax credits would be destabilizing, even as the state’s backstop is itself temporary.
The announcement also followed months of public warnings from Healey and other officials about an impending affordability crisis and the limits of the state’s ability to replace lost federal aid. The $250 million plan was unveiled after Jan. 1, once the federal credits had expired.
Healey said the administration waited in part because she “held that hope” Congress would act before the end of 2025. “We gave up until the deadline to see if they take action,” she said, adding that governors across the country were facing similar uncertainty.
Health Connector Executive Director Audrey Morse Gasteier said the assistance was not delayed in practice, even if the announcement came later.
“The help that’s being described today is baked into what people are seeing in terms of their premium increases and their contributions this open enrollment,” she said. Gasteier later emphasized that “this help is in effect for January because of the way we planned for the possibility of congressional inaction on this topic. So people are already seeing this help today.”
The open enrollment period ends Jan. 23.
The funding is aimed squarely at ConnectorCare enrollees below 400% of the federal poverty level. Roughly 25,000 people enrolled in ConnectorCare will not qualify, and tens of thousands of residents above that income threshold are still facing steep premium hikes without relief.
Healey acknowledged the limits of the plan. “It’s not going to help everybody,” she said, reiterating her call for Congress and the president to revive the enhanced credits.
Sam Drysdale is a reporter for State House News Service and State Affairs Pro. Reach her at sdrysdale@statehousenews.com.