The cost of complying with the One Big Beautiful Bill Act's new rules for MassHealth

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The federal government is tightening limits on which Americans are entitled to public health insurance, and Massachusetts is starting to prepare.

President Trump’s sweeping 2025 tax and spending bill, known as the One Big Beautiful Bill Act, includes new work requirements and more frequent eligibility checks for many low-income adults who rely on Medicaid coverage. Once fully phased in, which will take several years, the legislation is expected to strip $3.5 billion in federal health care funding from Massachusetts each year. And hundreds of thousands of state residents could lose their coverage because of the new eligibility restrictions.

The new rules begin in January 2027. Before then, the state is facing about $31 million in added costs just to comply with the law.

State officials told me they expect to spend the bulk of those funds, about $21 million, on upgrading computer systems needed to determine who qualifies for Medicaid — as well as boosting call center staff to respond to an anticipated increase in calls.

Additionally, the state Medicaid program — called MassHealth — will hire more in-house staff to process applications. It will also ramp up outreach to members through letters and text messages, said Elizabeth LaMontagne, chief operating officer of MassHealth.

“We'll be seeing increased workload, increased volume, increased calls,” LaMontagne told me.

This is just the start. MassHealth spending is growing at what officials say is an unsustainable pace. The program covers about 2 million people, or about 1 in 4 state residents.

“We're seeing a really sharp increase in the cost of providing health care,” LaMontagne said. “What's coming out of D.C. is making things worse.”

Under the new work requirements, many adults will have to prove they are employed at least 80 hours a month, or earn at least $580 a month. And the state will have to conduct checks twice a year, instead of once a year, to verify that members remain eligible. Both of these new policies demand more paperwork from individuals and the state.

The stakes are high. As the rules change, people who qualify for coverage could fall through the cracks and lose their benefits simply because they fail to meet paperwork deadlines.

Altogether, the changes “could result in enormous amounts of coverage loss — which is good for no one,” MassHealth undersecretary Mike Levine said at a meeting of hospital leaders last week. “So we’re really focused on getting ready.”

You can read more of my coverage here.