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Health Connector projects larger Commonwealth Care Trust Fund draw as federal tax credits expire
Summary
The Health Connector’s Administration and Finance Subcommittee heard staff present updated FY26 and FY27 projections showing a projected CCTF draw of about $474.9 million for FY26 and $561.5 million for FY27, driven by the ConnectorCare pilot extension and the end of enhanced federal premium tax credits.
The Board of the Commonwealth Health Insurance Connector Authority’s Administration and Finance Subcommittee received an updated financial outlook showing higher state subsidy needs as federal premium tax credits wane.
Kari Miller, a Health Connector staff member, opened the session and reviewed the agency’s funding structure, saying the Commonwealth Care Trust Fund (CCTF) pays all programmatic costs and about 35 percent of administrative costs. Miller and staff told the subcommittee that the Connector projects a FY26 gross CCTF draw of approximately $474.9 million and a FY27 gross draw of about $561.5 million.
Edith Calvao, a Health Connector staff member, said the FY26 increase is driven primarily by the extension of the ConnectorCare expansion pilot for people between 300 and 400 percent of the federal poverty level through calendar year 2026. Calvao also explained that the expiration of enhanced federal premium tax credits at the end of 2026 increases demand for state-funded premium wrap subsidies and that some plan types will no longer be eligible for federal credits.
Subcommittee members probed who would lose subsidies; Bela Gorman, a board member, and Nancy Turnbull, a board member, asked for specifics. Calvao and Executive Director Audrey Gasteier responded that certain populations will lose eligibility tied to immigration status and other federal policy changes referenced during the discussion.
Ritika Lakdawala, a Health Connector staff member, described operational cost pressure in FY26 resulting from vendor transitions: the organization has moved to a new contact center vendor and is migrating enrollment and premium-billing systems. To limit service disruption, staff are temporarily operating parallel systems, which has increased short-term costs. Staff said enrollment is projected to decline while revenue is expected to increase modestly because carriers’ administrative fees rise with higher premiums.
Josh Weinberg, presenting the administrative budget, said the FY27 administrative draw is proposed at $35 million from the CCTF to maintain reserves. Staff projected year-end reserves of roughly $52–55 million—about six months of operating coverage—even after the effects of one-time implementation costs dissipate.
The subcommittee asked for follow-up on FY28 assumptions; staff offered to provide more detail outside the meeting.
Why this matters: the projected increase in CCTF draws reflects both temporary operational costs and policy-driven changes in program eligibility that could shift costs to the state budget and affect consumers’ net premiums and subsidy availability.
