A Massachusetts agency that oversees health insurance for 460,000 public employees, retirees and their dependents is unable to pay providers after running out of money.
But a Massachusetts group is calling it “unacceptable” for the insurance agency to have a lack of backup options.
In January, The Group Insurance Commission (GIC) Executive Director Matthew Veno had flagged the agency’s budget shortfalls as a concern.
“This is the largest variance that we’ve seen in at least a decade, and this is consistent across all of our plans, and is driven primarily by rising provider prices and a couple of other topics,” he said at the time. He added, “We don’t know where this is going to head. My concern is that it is a persistent and steady trend going forward.”
In April, Veno said rising provider prices and increased utilization of prescription benefits, including for GLP-1 weight loss drugs, had caused the commission to run an average $20 million monthly deficit this fiscal year.
With the fiscal year set to end June 30, the commission is counting on taxpayers to cover its deficit and has a $237 million appropriation request pending before the Legislature.
The appropriation was the largest single request in a $756 million spending bill Gov. Maura Healey filed in early April.
However, in an email sent to providers on Friday, the GIC warned that it “does not know how soon the legislature will pass the bill and when the GIC will receive the requested funds.”
Instead, starting Monday, payment to providers for GIC member claims have been pending. They will remain pending until GIC receives the additional funds or until July 1.
The payment delay does not affect any other government programs, such as MassHealth or Medicare, according to the email.
The Massachusetts Health & Hospital Association (MHA) claims the disruption in payments “will undoubtedly result in serious financial consequences.”
Other than the bill, the association points out the GIC did not have any other contingency plan to handle the problem despite saying the funding shortfall was a “concern” since the beginning of the year.
Not looking at other options, MHA’s Executive Vice President and General Counsel Mike Sroczynski said is “unacceptable.”
“Massachusetts hospitals and health systems are not in a financial position to assume the budget shortfalls of the GIC program. While we appreciate the financial situation of the GIC, this directive is an unacceptable contingency plan to those challenges. We implore the GIC to seek an immediate, alternative resolution to its budget deficiency that will not further exacerbate the financial condition of healthcare providers,” Sroczynski wrote.
Veno said he isn’t worried about 2026’s budget.
In April, commission members asked about whether the GIC might need to adjust its fiscal 2026 budget request to reflect the higher fiscal 2025 costs. Veno said no adjustment is necessary.
“While we have been consistently running a deficiency, it’s been pretty consistent. So we were able to build an FY ’26 budget that reflects those trends,” he said.
State House News Service contributed to this reporting.
