Gov. Maura Healey’s fiscal year 2027 budget will feature measures to tamp down on rising costs at MassHealth as the administration eyes savings for high-demand programs like personal care attendants, according to an agency official.
Still, MassHealth’s budget will see an overall increase, said Leslie Darcy, chief of MassHealth’s Office of Long-Term Services and Supports. She described MassHealth as a $22 billion program that is “not sustainable.”
Healey must unveil her budget by Wednesday, and the administration is facing difficult choices as health care costs spiral while the state’s aging population continues to grow and strain state resources. Officials are also still working to address looming federal funding cuts and eligibility changes to MassHealth under the federal One Big Beautiful Bill Act, with some provisions not taking effect until 2027 and 2028.
Darcy previewed Monday that the governor’s fiscal 2027 budget will include “some measured, initial steps to start addressing cost growth.”
“The order of magnitude of what is coming in ’28 is significant,” Darcy said during a subcommittee meeting for the Commission on the Status of Persons with Disabilities.
“We are going to spend ’27 working together with advocates and the Legislature to really think about what we’re going to do for ’28,” Darcy continued. “So there will be some targeted reductions. There will be some one-time measures to bridge to ’28.”
Darcy added that officials won’t be taking a “rip the Band-Aid off approach to getting the budget back in check.”
The Office of the Secretary of Health and Human Services, which includes MassHealth, was funded at more than $22.6 billion in fiscal 2026, capturing the lion’s share of the $60.9 billion budget. In a budget brief last January, the Healey administration said MassHealth “faced significant fiscal pressures,” with increasing spending on pharmaceuticals and heightened utilization across acute hospital and behavioral health settings. The volume of MassHealth members using long-term services and supports had also increased by 11% since 2023, the brief said.
For fiscal 2027, Darcy said she’s expecting a “rate freeze across the board.” But costs will still rise, Darcy said, fueled by increased utilization and MassHealth supporting an older and “sicker” population.
“What I expect you to see is that the total budget will still go up significantly because we are growing,” Darcy said. She added, “We have some one-time solutions, and there will be some adjustments to the base in a couple of programs.”
A working group recently released recommendations to cut $32 million from the state’s $1.7 billion personal care attendant program. The majority of those savings would come from capping payments for meal prep support.
Darcy said the PCA working group will be a “model” as the Office of Long-Term Services and Supports convenes other panels to make “tough decisions” for reining in costs. She suggested other potential savings could come from adult foster care that’s seen utilization climb by 40% in the past two years, a rate she said was “wild.”
Darcy pointed out the office provides services and programs that are not required by the federal government. The office accounts for about one-third of MassHealth’s budget, she said.
“You think about the PCA program, adult foster care, group adult foster care, adult day health, day hab — these are all really, really, really, really important programs, but these are not programs that the federal government mandates that we cover,” Darcy said. “I think we all just need to have some honest conversations about what the commonwealth is going to be able to support over the next 10 years, so that we are being thoughtful and good public stewards of taxpayer dollars.”
Massachusetts stands to lose about $3.5 billion annually once all health care provisions of the federal law are implemented, according to Audrey Shelto of the Blue Cross Blue Shield of Massachusetts Foundation. New restrictions on provider taxes and payments to support hospitals are affecting funding dynamics for MassHealth, Darcy said.
The state’s uninsured rate is also expected to climb under MassHealth eligibility changes, which could further strain the Health Safety Net that saw a $300 million shortfall last year.
“For the past 10 years, we’ve struggled to cover all the costs of the uncompensated care that’s being provided,” Darcy said. “And then moving forward, if you think about the fact that there may be more people that don’t have insurance, we really need to work closely with our community hospital partners. We’re having conversations currently with community providers and MHA [Massachusetts Health & Hospital Association] about what we should do moving forward.”
