Neal, Baystate sound alarm on health cuts

SPRINGFIELD — Calling the looming impact of cuts to health care contained in the One Big Beautiful Bill and the expected expiration of tax credits from the Affordable Care Act “humongous,” the leader of the Valley’s largest health care system joined U.S. Rep. Richard Neal on Monday to highlight the devastation such changes will mean for the region’s workforce and economy.

“This is the single largest rollback in American history of health care programs,” said Baystate Health CEO Peter Banko at a gathering at the TD Bank building in downtown Springfield with dozens of officials including the mayors of Springfield and Chicopee, and members of the Springfield Regional Chamber of Commerce. The event was sponsored by the Western Massachusetts Economic Development Council.

An informational flier put out by Baystate Health showed that the changes will mean $1 trillion in federal health care cuts, and have a $4 billion to $5 billion impact on the Massachusetts budget. The Baystate system itself is project to experience shortcomings of $146.7 million annually, or 4.8% of the hospital’s bottom line. Given that the system’s cash flow last year was only 3.5%, the cuts would be massive to the region, officials said.

For Baystate Health, the federal cuts will mean layoffs, mergers, reduced services and longer wait lines for the emergency room, said Banko, as he and Neal discussed how new work requirements for Medicaid recipients, new cost-sharing requirements and a freeze on federal funds for health care — all a part of the Big Beautiful Bill — will have an impact in western Massachusetts.

The consequences will eat away at the region’s “economic engine,” Neal said, noting that health care is to Massachusetts what Microsoft, Boeing and Starbucks are to the Seattle area of Washington state.

“Health care in our valley is not just about the delivery of services … but it’s about the economics,” said Neal. “In a 40-mile stretch, from Springfield to Worcester, 47,000 people will get up today and go to work. And if you add Berkshire Medical Center, North Adams, Southbridge — you name it — tens of thousands of people go to work in health care in Massachusetts.”

Baystate Health, for one, is the largest employer in the region with 13,000 employees that care for 800,000 people in western Massachusetts. The University of Massachusetts Amherst, the region’s second largest employer, by comparison employs 9,000 people.

Neal later called the state the “epicenter of achievement” in health care, adding that, “If you’ve got a sick child, you’re coming to Massachusetts from across the world.

Nonetheless, the federal cuts are projected to amount to $4 billion or $5 billion toward what Massachusetts does best.

“The other argument that’s currently popular is that you can just replicate this [system] in other parts of the country,” Neal said. “No chance. It took us decades to build this system.”

Cuts outlined in the One Big Beautiful Bill are scheduled to take effect a month before the midterm elections in November 2026, so people won’t feel the impact until after having voted, Neal said. But in the meantime he said he is fighting for a two-year extension of the Affordable Care Act tax credits so the issue can be taken up at a later date.

Price hikes for everyone

It is not only Medicare and Medicaid recipients that will stand to be impacted by the new regulations. At Baystate Health, some 70% of patients use two forms of payment to cover their health care costs, but Banko said the federal government reimbursements don’t cover the full costs of their care.

“All of the people in the room with commercial [insurance], your rates are helping cover the difference,” said Banko, explaining how a lack of government assistance will set off a domino effect that will impact commercial rates so hospitals can meet their bottom line.

He expects that those with private insurance companies may see “double digit” increases to their premiums.

An increase in uninsured people, because they lost Medicaid, is expected to cost Baystate Health some $53.5 million, and cuts to the Affordable Care Act would potentially cost the hospital $10.4 million, Banko said.

Additionally, increases in cost-sharing for Medicaid — the portion of health care costs that some enrollees pay out-of-pocket — will likely leave many uninsured and not seeking services, which would mean a $9.2 million annual loss for Baystate. Other projected financial losses include $28.6 million in decreased Medicaid funding and $45 million toward the 340B drug program that provides medications for people with lower incomes.

“This next year is what I call bracing for impact,” said Banko, as he laid out a game plan to counteract the losses. The response by the hospital is to make attempts to expand services and access to them while cutting costs and streamline services.

“I’m trying to turn the battleship in the bathtub,” he said.

While he suspects there will be no hospital closures locally, Banko believes hospitals will close throughout the country in response to the lack of federal funds.

When asked how local businesses can assist in the struggle, Banko replied that, “Prayers are always good.” He also asked the public to “extend a little grace,” as Baystate Health prepares to make difficult yet necessary decisions in the future.

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