INSIDE THE ISSUE

> Why 3.6%?
> Serious Illness Coalition to End
> Needed Hospital Expansions
> Premium Tax Credit Votes Fail
> Health Insurance in Mass.
> Transition

MONDAY REPORT

MHA Urges New View on Benchmark Component

The months-long process of creating the Massachusetts state budget for Fiscal Year 2027 begins tomorrow when the Joint Committee on Ways and Means meets with state finance officials and others to discuss the consensus revenue forecast for the coming year. That forecast – essentially a projection of how much revenue the state will receive in the next fiscal year – will be used by the governor and legislature as they construct their FY27 budget plans.

The hearing is mandated by state law as is another component of the annual forecasting – that is, the determination by Ways & Means along with the Secretary of Administration & Finance of the “potential gross state product (PGSP)” growth rate for the calendar year. Unless the Health Policy Commission recommends differently, the PGSP growth rate becomes the healthcare cost benchmark. Throughout the years, the healthcare cost benchmark has always defaulted to the PGSP. The PGSP/healthcare benchmark has almost always been 3.6%.

But why? That’s the focus of a letter MHA sent to Administration & Finance Secretary Matthew Gorzkowicz, and the House and Senate Ways & Means Chairs Rep. Aaron Michlewitz (D-Boston) and Sen. Senator Michael Rodrigues (D-Westport). MHA argues that, critically, the current approach does not allow the commonwealth to assess the healthcare system’s performance in the most accurate way possible. And, in turn, that imbalance has a damaging ripple effect on healthcare finance and policy conversations through the duration of the entire fiscal year.

“For more than a decade since the benchmark’s creation in 2012, PGSP has been set at 3.6%,” MHA’s Senior Vice President of Healthcare Finance & Policy Dan McHale wrote to the finance leaders. “However, for the last decade the actual growth in the gross state product typically exceeded the PGSP amount that was determined each year. According to the U.S. Bureau of Economic Analysis, Massachusetts GDP growth has averaged 5.2% for the past 10 years. In seven of those years, the actual state GDP growth has exceeded the PGSP amount – and therefore also the healthcare cost benchmark. For the past three years, the state’s gross product grew 5.5% in 2024, 6.0% in 2023, and 7.1% in 2022.”

Because the PGSP factor has not been representative of the state’s economic growth, how can it be an appropriate benchmark for healthcare cost growth as the 2012 healthcare reform law intended, McHale asked in the letter. He added, “MHA respectfully requests the commonwealth transition to a method that incorporates economic data and historical experience into the process.”

He continued: “MHA believes the consistent application of an arbitrary 3.6% factor that was established 13 years ago is not a valid measure of economic growth given actual experience. MHA respectfully requests that [Administration & Finance] and the House and Senate Committees on Ways and Means deliberate a PGSP factor that takes into consideration the commonwealth’s actual economic growth, including considering the most recent 10-year period.”

Serious Illness Coalition to Disband

The Massachusetts Coalition for Serious Illness Care has announced it will wind down operations in 2026. The Coalition was formed in 2016 and consists of more than 135 groups, including MHA, dedicated to the belief that all people facing serious illnesses deserve care that is aligned with their goals and preferences.

The Coalition focused on improving advanced care planning, serious illness conversations, and on educating patients on the need to designate a healthcare agent. The group was also central to the concept of educating all aspects of a person’s care experience – from providers to clergy, nursing homes, family, and the patients themselves – on the importance of end-of-life conversations.

While the Coalition itself will wind down, its Medical Schools Collaborative will continue its faculty development program. And many of its groups, including MHA, will continue to work with the state on the MOLST-to-POLST transition that essentially creates an electronic medical order detailing the patient’s end-of-life wishes.

Hospitals Expand Across the State to Meet Demand

Hospitals, pressed by an aging population, patient demand, and historic capacity constraints, are expanding. Such expansions benefit other sectors, such as construction and manufacturing, which further fuels the economy across Massachusetts.

UMass Memorial Health

UMass Memorial Health (UMMH) received unanimous approval from the state’s Public Health Council last week to purchase a proton beam and to expand services at its UMass Memorial Cancer Center at Marlborough Hospital. The project is projected to cost $54 million and will be the only proton beam unit in Massachusetts outside of the two at Massachusetts General Hospital.

In filings with the state, UMMH said an average of 640 patients are currently treated in Boston, and that developments in the technology now make it economically feasible for it to purchase and operate its own unit in Central Massachusetts. It plans to purchase the equipment from the Massachusetts-based Mevion Medical Systems.

“Establishing a proton center in Marlborough will reduce the burden of traveling long distances, improve continuity of care, and ensure that lifesaving treatment is more accessible to patients, throughout Central Massachusetts, the surrounding region, and beyond,” UMass wrote.

UMMH told the State House News Service that proton therapy in Marlborough would be available in February 2028.

Boston Children’s Hospital

Rob Hale, the co-founder and president of Granite Telecommunications in Quincy, and his wife Karen have donated $100 million to Boston Children’s Hospital – the largest philanthropic gift in Children’s history.

According to the hospital, the gift will allow it “to reimagine how mental and behavioral healthcare is delivered to children and families.” The Hales’ name will be placed on a new 116-bed pediatric psychiatric hospital located on the campus of Franciscan Children’s in Brighton, and scheduled to open in 2029.

“This gift is nothing short of transformational,” said Kevin B. Churchwell, M.D., the CEO of Children’s. “It reflects extraordinary compassion and a shared belief that every child deserves not only physical health but also mental wellness.”

Cape Cod Healthcare

Cape Cod Healthcare (CCH) has completed Phase 2 of its $215 million project to bolster the cancer and cardiac care it provides.

In May, CCH the opened the first two floors of the new four-story, 141,148-square-foot Edwin Barbey Patient Care Pavilion at Cape Cod Hospital, which house the Davenport-Mugar Cancer Center. Those floors contain 36 private infusion bays, and expanded radiation therapy facilities that include two linear accelerators.

Phase 2 involves the opening of the top two floors this week. The third floor is dedicated to cardiac care, as well as specialized care for those recovering from interventional and surgical procedures. It will contain 32 beds. The fourth floor adds another 32 beds to help accommodate the growing demand for medical/surgical services. Each patient room in the pavilion offers single-bed occupancy.

Congress Continues Debating While EPTC Deadline Nears

Last Thursday, December 11, the U.S. Senate voted 51-48 against advancing a bill that would provide a clean three-year extension of the expiring Affordable Care Act (ACA) enhanced premium tax credits (EPTCs). This bill was the Democratic proposal to address the EPTCs’ expiration, and was widely expected to fail since it required at least 13 Republican supporters to overcome the 60-vote procedural threshold in the Senate. It received four GOP votes from Sens. Susan Collins (Maine), Lisa Murkowski (Alaska), Dan Sullivan (Alaska), and Josh Hawley (Missouri).

The same day, the Senate voted and failed to advance a Republican counterproposal, also by a 51-48 count. This counterproposal was spearheaded by Senators Mike Crapo (Idaho) and Bill Cassidy (Louisiana), the chairs of the Senate Committee on Finance and Committee on Health, Education, Labor, and Pensions, respectively. The Republican proposal does not include an extension of the ACA EPTCs, but instead would provide some individuals in select ACA plans up to $1,500 over the next two years through health savings accounts (HSAs), while also funding cost-sharing reduction (CSR) payments.

Both Massachusetts Senators voted in favor of the Democratic proposal to extend the tax credits for three years and against the Republican proposal. The Senate may depart for the holiday break without further action on the expiring tax credits despite ongoing proposals by various Senators to offer a compromise on a short-term extension.

Before the Senate votes, U.S. Senators Jeanne Shaheen (D-N.H.) and Mark Warner (D-VA) hosted a listening session to highlight the importance of the premium tax credits. Among those offering statements was Audrey Gasteier, executive director of the Massachusetts Health Connector, who said, “Because of the expiration, 330,000 of the people we serve in Massachusetts are now seeing premium spikes like nothing we’ve seen before in the Affordable Care Act era … A forthcoming increase in uninsurance will weaken our whole healthcare ecosystem, destabilizing our essential providers and insurance market risk pools, already made more fragile by cuts in the so-called One Big Beautiful Bill Act. Massachusetts hospitals and community health centers will have to shoulder more uncompensated care. Uninsured people who forgo care will later end up at their doors sicker, further straining caregivers and capacity. As a country, we will all pay for these increased costs and bear the risks of a delivery system on shakier ground.”

As the Senate hit a roadblock on the issue, the House Republican leadership announced it is considering its options on several bills related to an EPTC extension or alternatives. House Speaker Mike Johnson has proposed a framework of healthcare provisions, which includes strengthening HSAs and CSRs, passing pharmacy benefit manager reform, enhancing healthcare price transparency, implementing site neutral payments, and repealing limits on physician-owned hospitals. No legislative text associated with this framework has been put forward, and it is unclear whether floor action this week is possible.

Some Facts from CHIA’s Latest Health Insurance Survey

Massachusetts has the best insurance rate in the nation, but the positive news comes with some increasingly disturbing facts.

That’s the takeaway from the Center for Health Information and Analysis’ (CHIA’s) most recent Massachusetts Health Insurance Survey.

CHIA surveyed 5,365 residents between January and April 2025 and found:

• 97.9% of residents reported they had health insurance at some point in 2025 – which is a nation-leading percentage; 92.3% reported having continuous coverage over 12 months.
• 7.7% of residents reported that a family member had a period of uninsurance in the past 12 months; for those with incomes up to 300% FPL (the income level that qualifies individuals for the Health Safety Net), that figure was 14%. The CHIA report states having any member of a family without health insurance may affect access, utilization, and affordability for other family members.
• The state’s uninsured rate (2.1%) is well below the national rate of 8.2%, but higher than the 1.7% during CHIA’s last survey in 2023.
• Two-thirds of residents (66.3%) get coverage from their employer, 15.2% from Medicare, and 15.2% from MassHealth/ConnectorCare.
• Uninsured residents were disproportionately Hispanic (44.7%), and 87.9% had a family income below 300% of the federal poverty level.
• More than 2 in 5 residents (43.1%) reported difficulties with accessing care; 30.1% of residents reported difficulties with accessing primary care.
• Emergency department visits remained below pre-pandemic levels; 22.6% reported an ED visit in the past 12 months. Of those visiting an ED, 31.8% felt that their visit was for a condition they felt could have been treated by a non-emergency provider if one had been available.

More than a quarter of residents (28.4%) reported having forgone healthcare for themselves or a family member in the past 12 months due to the cost of that care. The burden of paying for care was greater for Black and Hispanic residents than it was for White individuals. More than 4 out of 5 residents with commercial insurance had plan deductibles, and nearly half of commercially insured Massachusetts residents (46.4%) reported having a high-deductible health plan (HDHP). (Another recent CHIA report found that residents with HDHPs were more likely to incur medical debt.)

Among residents who reported a visit for behavioral healthcare, 17.2% reported paying for their appointment entirely out of pocket.

“Given the anticipated disruptions in insurance coverage due to policy decisions at the federal level, continued attention to health insurance coverage is particularly critical,” the report reads. Massachusetts hospitals and health systems are preparing for hundreds of thousands of patients to have their insurance affected once new federal policies take hold – and for many of those patients to end up on the already-strained Health Safety Net, further challenging overall healthcare costs and affordability.

Transition

Rick Pollack, who has led the American Hospital Association since May 2015, has announced he will retire at the end of 2026. Pollack joined AHA 43 years ago and held a variety of positions, including serving more than 20 years as executive vice president for advocacy and public policy prior to becoming president and CEO. The AHA Board of Trustees has engaged WittKieffer to conduct a national search for Pollack’s successor.

John LoDico, Editor