The One Big Beautiful Bill Act (OB3) was signed into law on July 4, 2025, effectively cutting $1 trillion of funding from Medicaid and projected to leave 15 million people without coverage nationwide over the next decade.
Here in Massachusetts, that translates to a $3.5 billion loss for MassHealth per year – the largest Medicaid funding cut in the state’s history. As many as 300,000 Massachusetts residents could lose coverage next year in light of OB3’s new work reporting requirements and more frequent eligibility checks, joining 37,000 lawfully present immigrants who have already been shut out of ConnectorCare (subsidized Health Connector coverage), and around 40,000 more who will lose MassHealth or ConnectorCare due to the law’s new eligibility rules.
However, the people left uninsured won’t be the only people who feel the impact of these Medicaid cuts. This bill’s effects will ripple through every part of the health care system – hitting people with private insurance, health care providers, state agencies and more.
More red tape
OB3 will increase red tape and administrative burden for both people and state agencies.
The law will require Medicaid eligibility checks every six months for certain enrollees, instead of once a year, beginning December 31, 2026. This is on top of the new work reporting requirements and eligibility changes for certain lawfully present immigrants.
Massachusetts estimates that it will spend $21 million just upgrading computer systems and staffing call centers to handle the added administrative workload.
Layoffs throughout the system
The state is already experiencing a health care workforce crisis, especially in areas such as primary care, behavioral health and long-term care. When uncompensated care rises – meaning facilities absorb the cost of treating uninsured patients with no reimbursement – the increased financial strain will have workforce implications. This could include, shortened hours and layoffs for the 441,000 health workers in the state. Staffing shortages will reduce timely access to care, from routine appointments to inpatient hospitalizations.
Private insurance prices soar
Even if you’re not on MassHealth, that doesn’t necessarily mean your plan won’t be affected.
Over 400,000 residents purchase coverage through the Massachusetts Health Connector and this past year, nearly 14% who didn’t qualify for subsidized plans saw premiums rise. These increases are compounded for middle-income people who no longer qualify for ConnectorCare due to the expiration of enhanced federal subsidies.
This is in the context of rising health care costs across the board where insurance premiums in the Massachusetts “merged market” – consisting of hundreds of thousands of small businesses and individuals – will see double-digit premium increases next year.
Employers are facing the highest increase in health plan coverage in 15 years, and many are planning to mitigate these costs by making greater paycheck deductions at the end of the month.
Limited health services
Between uncompensated care and funding cuts, less profitable services including primary care, pediatrics, maternity, mental health and substance use treatment could be in trouble.
Already, existing budget constraints have disproportionately affected maternity care, where an entire unit closure in Methuen and suspension of services in Springfield just this past year have left birthing people to scramble to find labor and delivery care elsewhere.
Facilities may close
MassHealth revenue accounts for about half of funding for nursing facilities and community health centers (CHCs). In Massachusetts, there are 50 CHCs that serve about one million patients per year where 43% of patients are covered by Medicaid.
Many community health clinics were already operating on razor thin margins, and these cuts have initiated their effect with a combined 200 layoffs from three major behavioral health providers across Massachusetts at the end of last month.
Other community-based providers may be forced to merge and leave medical underserved areas even more inaccessible, and more people will end up in the emergency departments.
OB3’s impact has already begun to take hold by terminating coverage, eliminating subsidies, and increasing premiums for hundreds of thousands in Massachusetts. Residents are struggling to identify alternative coverage options that won’t require spending half of their income, and many feel their only choice is to be uninsured.
As new federal policies continue to be implemented, HCFA is working with partners across the state to mitigate these coverage losses from OB3. One of the ways we are doing this is by coordinating a statewide communications, outreach and education campaign in collaboration with MassHealth and 47 community- and faith-based organizations about the new Medicaid work requirements and more frequent eligibility checks. Our collective advocacy and community engagement work is more important than ever as we continue to strategize ways to connect Massachusetts residents with affordable and accessible health care.
Julia Ma is Health Policy Intern at Health Care For All.
