The Cambridge Health Alliance has adopted a budget for the next fiscal year that makes hardly any allowance for Trump-backed changes to Medicaid expected to push more than 100,000 low-income patients off the rolls in Massachusetts.
Medicaid, which is funded jointly by the federal and state governments, covers care for low-income children and adults, including many nursing home residents. Work requirements and more frequent eligibility checks that take effect Jan. 1 could affect many patients at the safety-net healthcare system, originally the city’s public hospital, where more than half of patients are covered by Medicaid, have insurance but are too poor to pay for care or have no insurance.
“Nationally, this change is expected to cause many Medicaid participants to lose their coverage,” CHA spokesperson David Cecere said. He said if CHA patients are affected by the cuts, they would likely shift to uninsured status or another program serving low-income patients. Both could increase costs to the healthcare system.
CHA deliberately chose to omit estimating the full costs of the new Medicaid work requirements and eligibility checks.
Many hospitals face uncertainty, especially safety-net hospitals like CHA, said Thomas Tsai, a professor of health policy at the Harvard School of Public Health and a surgeon at Brigham and Women’s Hospital. He said “some of the early reports suggest that hospitals are already seeing reduced admissions for patients on Medicaid or (the Affordable Care Act).”
Income-based premium tax credits for people enrolled in Affordable Care Act health insurance plans expired at the end of 2025, expected to cause many to drop coverage.
“We are starting to see how this will play out,” Tsai said. He said he interprets the approach taken shows “that CHA is remaining committed to its mission to serve the community,” adding that hospitals “don’t want to overreact” to the cuts.
Medicaid’s massive scope
The Trump administration’s One Big Beautiful Budget Act, approved July 2025, is expected to cut billions of dollars from federal expenditures for Medicaid over 10 years, according to the Congressional Budget Office. One change taking effect Jan. 1 will require Medicaid recipients aged 19 to 64 to prove they’re working or participating in community service, education and/or a work program for at least 80 hours a month. (People with certain disabilities can receive exemptions.) And, states must certify that recipients qualify for Medicaid every six months instead of annually.
Between 141,000 and 203,000 Medicaid recipients in Massachusetts could lose coverage because of the work and redetermination requirements, a report in September by the Blue Cross and Blue Shield Foundation of Massachusetts and the Urban Institute found. Some who are still eligible will be disenrolled for not filling out paperwork.
“CHA has incorporated a modest negative adjustment to our payer mix to account for this but the impact could be more detrimental than we have projected,” Cecere said.
Hospitals’ reaction “varies quite a bit,” with some “adjusting their budget ahead of time” and others cutting “retroactively,” Tsai said. “The concern is hospitals cutting important services or community benefit programs.”
Asked how community members can make their priorities known if hospitals choose the option of reducing costs and services retroactively, Tsai said: “It is important for residents to let the health system know what services are valuable.”
Budget challenges already exist
The health alliance has struggled to earn a surplus on its healthcare operations. The fiscal year 2027 budget forecasts net income of $7.3 million. Recurring revenue, which includes $9 million from the city, will total almost $1.2 billion. CHA expects to end this fiscal year with $51.7 million in net income but only because the system received $67.1 million in revenue from state and federal programs that had not been expected to arrive this year; without that money the alliance would have recorded a loss.
CHA credits more disciplined spending, a higher number of doctors’ visits and increased productivity for its improved results in fiscal 2027.
Some of the productivity expectations were cited by doctors and other medical professionals who started a new union at CHA last year. They said that “templates” used by managers left little flexibility to see patients for more than 15-minute appointments and they were expected to handle as many as 13 patients in a four-hour period.
A narrative with the fiscal year 2027 budget says “templating work” helped increase the volume of outpatient visits in this fiscal year and will continue to do so in fiscal 2027.
The new union, known as SHARE, is part of the American Federation of State, County and Municipal Employees, AFL-CIO. SHARE also represents workers at the University of Massachusetts medical institutions and includes the Harvard University Clerical and Technical Employees union.
Andrea Caceres, lead organizer for all the SHARE unions, said the CHA unit is still negotiating its first contract and is not focused on compensation, although pay is an issue. “Burnout and health finances – how are we going to balance those things?” she said. “Both the employer and the union care.” Caceres said she has not seen CHA’s budget and did not know it is public.
Another uncertainty in the fiscal 2027 CHA budget besides the impacts of Medicaid changes is wages for union and non-union workers. The budget includes a 2 percent wage increase July 1 and another 1 percent next January 1 for non-union employees.
Alliance chief financial officer Jill Batty acknowledged at the June 16 trustees’ meeting approving the budget that the increase “is not going to sit well with our staff.” Batty also said CHA will impose “more austerity than we normally have” for all wage increases.
The budget Includes estimates of pay hikes for union workers whose contracts are being negotiated. If agreements call for higher increases they will be reported as a “variance” from the budget, she said.
The budget includes a $20-million fund for potential “strategic initiatives and/or reserves.” CHA spokesperson Cecere said the fund wasn’t set aside to cover impacts of the Medicaid changes.
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