On January 22nd, the Healey-Driscoll administration filed its budget proposal for Fiscal Year (FY) 2026. The $62.07 billion spending plan increases spending over the FY 2025 General Appropriations Act (GAA) by $4.3 billion (7.4 percent) and over the administration’s estimated spending level of $60.26 billion by $1.8 billion (2.1 percent). 

Health care makes up the largest share of spending in the annual budget – accounting for 46 percent of all spending in the FY 2025 budget signed by Governor Healey last July. Unsurprisingly, health care accounts for the majority of all spending growth in Governor Healey’s FY 2026 proposal – increasing by $2.8 billion over the prior year’s budget. Health care cost increases also account for the significant difference between spending in the FY 2025 GAA and the administration’s estimate for actual spending in the current fiscal year; the administration expects the state’s Medicaid program (MassHealth) to grow by $1.5 billion (gross – not net of federal revenues) over the amount that was appropriated at the start of the year.