Senate Ways and Means Committee Chair Michael Rodrigues.Photo: Chris Lisinski/SHNS
BOSTON (State House News Service) — Massachusetts lawmakers on Thursday rushed to Gov. Maura Healey's desk a $234 million funding package that one senator said is needed immediately to address severe financial problems at certain unnamed hospitals.
The legislation, passed through both branches ahead of a fiscal deadline for hospitals, includes $199 million for acute care hospitals and $77 million for the Health Safety Net Trust Fund, which reimburses hospitals and community health centers for services to uninsured and underinsured residents. Community health centers will receive an additional $35 million, including $2.5 million earmarked for shared services.
"Many of our hospitals are at — very close to... defaulting on their bond covenants, and they need this cash infused now," said Senate Ways and Means Chair Michael Rodrigues. "Which is why we in the Senate and our friends in the House engaged in conversations to move this portion of the supplemental budget as quickly as possible."
According to Rodrigues, many hospitals end their fiscal year on Sept. 30, necessitating quick action to provide financial breathing room. Hospital aid cleared the Senate in June, but a final package favored by both branches did not come together until this week.
Thursday's debate surrounding the bill touched on broader systemic issues, with legislators raising concerns about long-term sustainability, cost control failures and uncertainty at the federal level.
Rodrigues said the Health Safety Net (HSN) program — which pays hospitals for medically necessary care provided to low-income and uninsured patients — is seeing a "widening gap between available funds and the cost of claims submitted to the program as a result of, once again, reckless federal policies."
Senate Minority Leader Bruce Tarr pressed Rodrigues to explain the structural deficiencies in the program, especially in a state that boasts the highest rate of insured residents in the nation.
"The Health Safety Net was created to address shortfalls in revenue collections from hospitals... so, if folks have insurance, and there's a fund that's supposed to help when insurance doesn't cover the cost for hospitals, the question is, why is it that we have such a significant deficiency?" Tarr asked.
Rodrigues pointed to several contributing factors: soaring health care inflation — rising by 11% this fiscal year alone, he said — growing unemployment, and underinsurance. As more residents lose job-based insurance and struggle to access the health insurance market, they are increasingly relying on the Health Safety Net.
"Between high rates of health care inflation, between the rising unemployment, people losing their insurance, people having insurance that are underinsured — those are the three reasons that I can state why we’re seeing this problem with the Health Safety Net," Rodrigues said.
Sen. Cindy Friedman, chair of the Health Care Financing Committee, emphasized that hospitals have already absorbed the costs of associated with the funding in the bill.
"The hospitals have spent this money. The hospitals have given this care," Friedman said. "When people show up in their emergency rooms by our laws and by their moral code, they take care of people... They are seeing a continual increase in this... And I will take this opportunity to say it is getting worse."
Friedman described a deteriorating situation where patients — unable to access timely or affordable primary care — are waiting longer, getting sicker and then showing up in hospital emergency rooms with more expensive and dire medical needs.
She also noted that even residents with insurance are often underinsured, with coverage failing to meet the actual cost of care.
"They may have insurance, but their insurance is not covering the cost of the care that they’re seeking,” Friedman said. “So unless we deal with the issues of how and where people get care and when they get it, like primary care or at the front door before they get sick, we’re just gonna see this increase and it’s gonna become exponential."
Friedman also warned that Massachusetts's reliance on sectors like education, medicine and the federal government has left the state vulnerable to economic shifts.
"We’ve seen massive layoffs in the federal government. Many of those people... live in the commonwealth. And so what we’re seeing is more and more uninsured folks," she said.
Friedman added that uninsured people going to these hospitals and community health centers are longtime residents, not new arrivals, alluding to arguments about immigrants straining the state's resources.
Tarr later pushed back slightly, noting that not all uninsured individuals in the system are longtime Massachusetts residents, and "I don't think we should avoid that reality in our discussion." He also raised concerns about the sustainability of the health care system under the new pressures.
"What we’re dealing with here is a symptom of several larger problems, very significant problems," Tarr said.
He continued, "We have been largely unsuccessful with regard to cost containment. We repeatedly set benchmarks that are not met. We continually see double-digit increases in the cost of health care inflation. And that is a very vexing problem because none of us want to sacrifice quality or access. But at the same time, we all seek the very elusive tools that we need to be able to reduce the cost of health care."
The state’s ability to provide long-term relief is also constrained by limitations on where new revenue can be spent. While Massachusetts has seen tax revenue growth, much of it is tied to surtax and excess revenue gains earmarked for specific sectors, including transportation and education — not health care.
Lawmakers also expressed concern about cuts to Medicaid under President Donald Trump and Congress's One Big Beautiful Bill. Cuts under that law could leave more people uninsured and place even more strain on the already stressed Health Safety Net.
Written by Sam Drysdale/State House News Service