Governor Maura Healey filed a $2.24 billion supplemental budget on Wednesday that would create a brand-new health care stabilization fund, aiming to address emerging health care needs as federal policy changes ripple through the state's health programs. The proposal comes as the state's existing health safety net faces funding pressure.
A New Fund Built From Leftover Capital Gains
According to The Boston Globe, the supplemental budget would create a new health care account intended to address emerging health care needs and new costs tied to federal policy changes, including provisions in the One Big Beautiful Bill Act that could affect MassHealth coverage.
The stakes for that new fund become clearer when you look at what the state's existing Health Safety Net Trust Fund is already up against. That fund exists to reimburse hospitals for care provided to uninsured and underinsured patients and to support a portion of MasHealth and Commonwealth Care costs, according to the Blue Cross Blue Shield of Massachusetts Foundation. Massachusetts law establishes it as a dedicated fund on the state's books, per the Massachusetts Legislature.
A Shortfall Measured in Hundreds of Millions
The Massachusetts Health & Hospital Association has warned that shortfalls could balloon to as much as $900 million in subsequent years as up to 300,000 residents statewide lose coverage.
Part of that pressure traces to changes already underway. About 36,000 residents lost ConnectorCare Type 1 coverage as of January 1, 2026, and were shifted toward the Health Safety Net, the hospital association's report notes.
SNAP Staffing and a Sheriffs' Reserve Also in the Mix
Healey's supplemental budget is not limited to health care. The Globe reports it steers $41.5 million to the Department of Transitional Assistance, which administers SNAP benefits, including $26.6 million for caseworkers that would let the state retain 78 employees hired this year and hire ten more.
The overall $63.4 billion state budget rose about 3.9 percent over fiscal 2026, per the Globe's reporting.
What Happens Next
Healey signed two earlier spending bills in fiscal 2026 — one providing $300 million for rising public-worker health insurance costs, and a second delivering more than $1.4 billion through a supplemental income surtax spending bill, the Globe reports. Fiscal experts have cautioned against leaning too heavily on volatile capital gains revenue, even as the state's high-earner surtax, approved by a 2022 constitutional amendment, continues to generate surplus funds for education and transportation while other, non-surtax taxes show less robust growth.
Healey has asked lawmakers to act quickly to close the books on fiscal 2026. Massachusetts lawmakers have adopted a rule permitting limited election-season and lame-duck formal sessions, which may take up appropriations bills filed after July 31 — meaning legislators will get a chance to debate and amend a House Ways and Means version of Healey's bill before any of it becomes law.
Healey's supplemental budget also touches areas far outside health care, including a proposal to overhaul how utility companies purchase electricity for basic-service customers, which the Globe reports is expected to save ratepayers $610 million, a two-month suspension of the state gas tax in response to higher prices tied to the ongoing war in Iran, and a proposed cap on concert-ticket resale prices at 110 percent of face value.
