We have received several inquiries, from concerned retirees, regarding a report in today’s Boston Globe (the article might be paywalled for non-Globe subscribers) regarding the state’s Group Insurance Commission (GIC) having “run out of money” to pay claims. While it is true that the GIC requires a supplemental budget appropriation to pay claims through the end of FY25, the situation comes as no surprise and is not a reason to panic. Health care services for GIC enrollees should continue without interruption.
Mass Retirees closely follows the activities of the GIC and has known of the growing budget deficit for several months. In fact, we reported on the supplemental budget request in an April Weekly Update, just after Governor Maura Healey filed the bill. To be clear, none of this comes as any surprise to our Association.
Governor Healey’s supplemental budget contains an additional $240 million appropriation for the GIC. The legislation is now before the House, which will likely act on the bill in the very near future. The measure will then go to the Senate for approval. Contrary to the Globe’s reporting, we do not believe the supplemental budget to be “stalled” or delayed. The governor filed the supplemental budget in April, just as the House began debate on the FY26 State Budget. The bill is following the normal course of legislative action.
As we have previously reported to our members, the GIC requires a supplemental budget appropriation – something that is very much an ordinary occurrence toward the end of the fiscal year. Due to the timing of the state’s fiscal calendar and the annual budget process, the GIC (as well as other governmental agencies) often begins the fiscal year with a structural budget deficit in which state leaders know must be addressed going forward. What makes this year slightly different is the size of the deficit.
Not only did the GIC begin FY25 with a larger structural deficit than it had in recent years, but rising health care costs have also added additional unexpected costs to the GIC. As we reported in yesterday’s Weekly Update, the extremely high cost of GLP-1 weight loss drugs alone has caused unexpected cost overruns in nearly every health care budget across the country.
It is also important for us to point out, as we did in April’s Weekly Update, that the GIC’s budget shortfall does not impact the insurance premiums paid by retirees, surviving spouses, or active employees. As a self-insured plan, the Commonwealth must cover the costs of budget shortfalls – as it has done since the creation of the GIC in the 1950s!
Despite the alarmist tone of the reporting on this issue, our Association does not believe there is any reason for panic. Again, there should be no interruption in services. At the same time, we are doing our part in advocating for a prompt passage of the supplemental budget to ensure that providers are paid in a timely manner..
As always, we will continue to keep members well informed on news regarding your health insurance coverage and public retirement.
Most Sincerely,
Shawn Duhamel
Chief Executive Officer
Mass Retirees Association