The Massachusetts Executive Office of Health and Human Services has begun early stakeholder engagement for the next Section 1115 demonstration waiver from 2028 to 2032, which will reflect the priorities of MassHealth, the Commonwealth’s Medicaid and CHIP (Children’s Health Insurance Program) system. The program covers roughly two million residents and operates with a budget of more than $20 billion in annual state and federal spending.
In two public meetings November 10 and 17, 2025, senior officials from MassHealth—Ryan Schwarz and Caitlin Towey—outlined MassHealth’s early thinking for the next 1115 demonstration in the “Roadmap for MassHealth’s 2028–2032 1115 Demonstration Extension,” released in October 2025. They emphasized the Commonwealth’s commitment to preserving core programs while acknowledging a more challenging federal landscape than in prior waiver cycles.
The roadmap highlights the 28-year trajectory of progress enabled by Massachusetts’ 1115 authority—from establishing the Accountable Care Organization (ACO) model and expanding substance use disorder (SUD) treatment, to strengthening safety net providers and driving the uninsured rate to 3 percent, the lowest in the nation. More recent demonstration cycles have deepened primary care investments, expanded the behavioral health continuum, advanced health equity incentives, and integrated housing and nutrition supports into ACO benefits.
Nonetheless, the roadmap also underscores the significant headwinds that are shaping the next waiver. The federal budget reconciliation act (P.L. 119-21, OBBBA) signed in July 2025 is projected to result in coverage losses for up to 300,000 Massachusettsresidents and as much as $3.5 billion in lost annual federal healthcare funding. Meanwhile, new federal policy stances, such as rescinding health-related social needs (HRSN) guidance and discontinuing approval of continuous eligibility authorities, will require Massachusetts to rethink elements of its current demonstration. State budget pressures are also a factor. MassHealth now accounts for nearly one-third of total state spending.
A major source of uncertainty is the lack of federal guidance on several core elements of the existing waiver. During November’s stakeholder sessions, state leaders said they are still awaiting direction from the Centers for Medicare & Medicaid Services (CMS) on several issues, including budget neutrality, hospital transformation funding, and HRSN services.
- HRSN: Current HRSN initiatives were enabled by guidance issued under the Biden Administration, which has since been rescinded. MassHealth officials said they intend to request approval for HRSN-like services in the upcoming waiver, even if the program must be redesigned or authorized through different mechanisms.
- Workforce Initiatives: Workforce funding, currently about $40 million over five years, will not be allowed under 1115 authority moving forward. State officials said they must identify alternative pathways to sustain or reconfigure workforce efforts if they are to continue.
- ACO & MCO Programs: Stakeholders asked for updates to the ACO and managed care organization (MCO) programs. MassHealth confirmed that the current ACO contracts run through December 31, 2027; however, they did note that Tufts Health Plan will exit the MCO program at the end of 2025, though this will have no effect on MassHealth’s two ACOs. Future ACO and MCO re-procurements could lead to changes, but those decisions remain several years out.
- Behavioral Health: Behavioral health policy also drew substantial interest. The state is assessing its behavioral health diversion system to determine which components require continued 1115 authority and where changes may be needed. Officials also confirmed that they intend to request continued 1115 authority for the Program for Assertive Community Treatment (PACT)—a multidisciplinary service for individuals with serious mental illness.
- Primary Care: Officials described a “crisis in primary care access”, driven by provider shortages and prolonged underinvestment. Although Massachusetts has historically led the nation in primary care spending, state leaders noted that the 1115 waiver alone cannot resolve these challenges. Gov. Maura Healey’s administration has convened a new task force to assess primary care access and financing, and MassHealth indicated it intends to align with that panel’s work.
- Cost Containment: Cost containment remains a priority. Officials said managing rising program costs is a theme that will be embedded throughout the renewal process.
As that effort unfolds in 2026, the State appears to be focused on maintaining core programs, adapting to uncertain federal guidance, and preserving flexibility. Officials said they are evaluating whether some current initiatives may need to shift from waiver authority to the State Plan, depending on forthcoming CMS policies. They are also closely monitoring other states’ expiring waivers to understand what CMS may approve under the current administration.
HMA experts have extensive expertise in helping to draft, implement, and evaluate 1115 demonstrations across the country. Our team in Massachusetts will be following the Commonwealth’s efforts closely and are available to answer your organization’s questions on how to navigate these new developments.
