By Sarah Heinonen | The Westfield News | sheinonen@thereminder.com
SPRINGFIELD — Baystate Health CEO Peter Banko and U.S. Rep. Richard Neal sat on either side of a low table in front of about 150 officials, health industry leaders and community organizers.
The Dec. 15 panel of two, arranged by the Springfield Regional Chamber, answered questions about what fallout to expect from the federal One Big Beautiful Bill Act, also called the OB3 Act, which was passed in July.
As part of the legislation, federal subsidies that lowered premiums on insurance plans obtained through the Affordable Care Act are set to expire. In Massachusetts, the Affordable Care Act marketplace is known as the Health Connector. Democrats pushed to extend the subsidies, and the resulting gridlock is what cause the recent government shutdown. Neal said he had not given up hope on forcing a vote in the U.S. House of Representatives on whether to extend the subsidies for two years. Neal said forcing such a vote was “uphill,” but on Dec. 17, four Republicans joined with House Democrats to force the vote. As of press time, the future of the subsidies was uncertain.
Under the OB3 Act, $1 trillion was cut from the federal budget for healthcare programs. For Massachusetts, that translates to a reduction of $4 million to $5 million.
Neal said the new eligibility requirements put 31,000 state residents in danger of losing their coverage completely, while hundreds of thousands more will see their premiums increase dramatically. In Neal’s district alone, there are 287,000 people on Medicare, and 106,000 of them are children. He said 21% of Massachusetts residents are uninsured, but every child in the state has coverage, if not through a private plan, then through Medicaid.
The legislation’s changes to Medicaid eligibility implement work requirements, which Banko said have not worked in Georgia or Arkansas, where he previously worked in hospital administration. Medicaid mostly covers low-income Americans. More than 1-in-3 Medicaid recipients are children, 10% are seniors and another 10% are people with disabilities.
“We’re not talking about people who don’t deserve it,” Banko said of the healthcare coverage. The system may not be perfect he said, but “we don’t throw the baby out with the bathwater.”
Neal said politics have colored the way people see Medicaid. He said that if you ask people if they support the Affordable Care Act, they will say yes. But ask them if they support Obamacare — the nickname given to the law by Republicans when it was passed — and they will say no.
“If people think you’re taking it away from them and giving it to someone else, it’s a loser,” Neal said. He emphasized that the Affordable Care Act expands insurance coverage to more people, rather than choosing who gets coverage.
The cuts will also impact commercial insurance plans, Banko said. Under the law, hospitals are required to treat people with emergencies regardless of their ability to pay. As more uninsured people visit emergency departments for healthcare, the unpaid costs and financial pressures will filter into the wider insurance market.
“Emergency room visits are a bad way to get healthcare,” Neal said.
Neal went on to say, “Healthcare in our valley is not just about services.” He explained that it is also about people, including the “tens of thousands” employed in the area’s healthcare industry. There are more than 1,300 doctors and providers, and nearly 13,000 employees across Baystate Health’s network of four hospitals and 50 medical offices. Mercy Medical Center in Springfield employs 2,000 more, another 3,000 are employed by Cooley Dickinson Hospital in Northampton.
From a different perspective, Neal said, Medicare is the largest employer in Western Massachusetts because so much healthcare is paid through the program. Banko said nearly half of Baystate’s patients, 48%, have Medicare for insurance. Another 23% are on Medicaid.
Cost of business
While 71% of Baystate patients use Medicare and Medicaid, Banko said neither of these programs fully cover care expenses incurred by patients. Last year, Baystate Health “operated in the positive” for the first time in six years. Banko said the $180 million in revenue was reinvested back into the facilities. However, he said the OB3 Act “wipes that out.” Banko said the expenses are largely out of the company’s control. These include employee health insurance costs and supplies. He said half of the rise in supply costs are due to federal tariff’s imposed by the Trump administration.
Banko, who took over as CEO in 2024, remarked that he has taken heat over recent decisions, including offering buyouts for some non-patient facing personnel who decide to voluntarily separate from the company.
“I’m trying to turn a battleship in a bathtub,” he said of his efforts to maneuver the company into a healthy financial position.
Banko said people should brace themselves for changes the healthcare industry will make in response to these economic factors. He predicted mergers and acquisitions as companies try to make use of economies of scale. There will likely be a streamlining of services and programs and longer wait times in emergency departments as people without primary care doctors seek treatment. He acknowledged that wait times are already an issue.
Banko said many of the impacts will not hit people’s wallets until after the mid-term elections in November 2026. “We’ve got time, so our community has to advocate on our behalf in Boston and Washington. Neal said the American Hospital Association was also advocating against the end of the subsidies.
When asked what else people can do to help, Banko quipped, “Prayers are always good,” before asking the public to “support the people in our organizations” and “extend a little grace.”
