Affordable massachusetts health insurance

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Massachusetts health insurance marketplace: history and news of the state’s exchange

Average rate increase for 2019 across all insurers is less than 5 percent; open enrollment extended through January 23.

Louise Norris
Health insurance & health reform authority
December 15, 2018

Highlights and updates

Open enrollment for 2019 plans continues until January 23, 2019.
Lowest uninsured rate and lowest average unsubsidized premiums in the country.
Average premiums 4.7% higher for 2019.
UnitedHealthcare was required to rejoin the exchange for 2019; Nine insurers offering plans.
Individual & small group pools merged; age rating capped at 2:1.
Individual mandate will remain in effect.
State is penalizing employers if employees receive state-subsidized coverage.
Year-over-year enrollment was up 2.4% for 2018.
Minuteman in receivership, did not reopen as a for-profit insurer in 2018.
CeltiCare also exited, but impact was minor.
Average rate increases spiked when CSR cost was added to silver rates.
New platform for SHOP enrollees.

Massachusetts exchange overview

Massachusetts runs its own exchange, Massachusetts Health Connector. It’s an active purchaser exchange, which means the exchange determines which plans are offered for sale (the exchange prefers to limit the number of available plans; details below). The state exchange predates the ACA by several years; healthcare reform that took effect in Massachusetts in 2006 was widely considered a blueprint for the ACA. Massachusetts has a very robust exchange, with more participating carriers than most states.

Residents in Massachusetts have access to the federal ACA subsidies, and many (those with income up to 300 percent of the poverty level) also have access to state subsidies via ConnectorCare (details below), although those subsidies are not as robust as they were in previous years.

Massachusetts has the lowest uninsured rate in the country, with only 2.5 percent of the state’s population uninsured as of 2016, according to U.S. Census data. This is due to both the ACA and the health care reform measures that Massachusetts put in place in 2006. The Massachusetts exchange also has the lowest-priced individual market plans in the country in 2018. And there are nine insurers offering plans for 2019, which makes Massachusetts Health Connector one of the most robust exchanges in the country in terms of insurer competition. This 2018 Health Affairs article details some of the reasons for the exchange’s success.

Massachusetts and Vermont are the only two states where the individual and small group risk pools have been merged (DC also has a modified merged risk pool, but it operates more like the rest of the country, and less like Vermont and Massachusetts), which means that the individual market is less volatile than many other states.

Massachusetts also caps the age rating ratio for premiums at 2:1, so older enrollees cannot be charged more than two times as much as younger enrollees. The ACA set the ratio at 3:1, which nearly every other state utilizes. New York and Vermont are the only other states that don’t use the 3:1 ratio, and they both prohibit age rating altogether, using a 1:1 ratio instead.

Open enrollment extended

Since Massachusetts runs its own exchange, they have flexibility on open enrollment dates. Seven of the 12 fully state-run exchanges opted to extend open enrollment for 2019 plans, and Massachusetts is among them.

Massachusetts residents have until December 23 to select a plan with a January 1 effective date. Plans selected between December 24 and January 23 will have coverage effective February 1, 2019.

As of November 26, 2018, more than 264,000 people had selected plans for 2019 through the Massachusetts Health Connector, which was up about 4 percent over the same time period the year before. And more than 254,000 of them had paid their January premiums already at that point.

2019 rates and plans

Average premiums for Massachusetts Health Connector plans are 4.7 percent higher for 2019 than they were for 2018. The average increase by insurer ranges from a 1.4 percent average increase for Tufts Health Plan Direct (which covers 43 percent of the state’s exchange enrollees) to 11.3 percent for Fallon Health (which covers just 4 percent of enrollees):

BMC HealthNet Plan (BMCHP): 7 percent increase
Fallon Community Health Plan: 11.3 percent increase
Health New England (HNE): 1.9 percent increase
Neighborhood Health Plan (NHP): 5.9 percent increase
Tufts Health Plan – Direct: 1.4 percent increase
Blue Cross Blue Shield of Massachusetts (BCBSMA): 7.8 percent increase
Harvard Pilgrim Health Care (HPHC): 4.9 percent increase
Tufts Health Plan – Premier: 3.5 percent increase
UnitedHealthcare: New to the exchange for 2019 (after exiting at the end of 2016)

The exchange reported that for the 58,021 members who don’t receive any subsidies, average premiums (assuming they keep their existing plans) would be 2.7 percent higher in 2019.

State law in Massachusetts requires insurers to sell plans on the exchange if they have more than 5,000 enrollees in the merged individual/small group market. UnitedHealthcare now has more than 5,000 enrollees in small group plans in Massachusetts, so they had to file plans to offer on-exchange coverage in both the individual and small group markets for 2019. But David Wichmann, chief executive of UnitedHealth Group, clarified that returning to the exchange “wasn’t necessarily a voluntary decision on our part.”

UnitedHealthcare previously participated in the Massachusetts exchange, but exited at the end of 2016. Prior to their exit, they only insured about 1 percent of the exchange’s enrollees. The only other states where UnitedHealthcare still offers exchange plans are Nevada and New York.

Massachusetts individual mandate remains in effect, even after federal penalty ends

Massachusetts has had an individual mandate since 2006, and it will remain in effect even after the ACA’s individual mandate penalty is eliminated at the end of 2018. The state has re-implemented employer health coverage reporting in 2018, after suspended it in 2014, when the ACA took effect. The employer mandate and associated employer informational reporting will remain in effect at the federal level in 2019 and beyond, but the state will need to begin enforcing its own individual mandate again in 2019, so employer reporting will once again play a role.

Penalty amounts under Massachusetts’ individual mandate are based on residents’ income and the cost of various plans in the exchange. And unlike the ACA penalty, the Massachusetts penalty only applies to adults. From 2014 through 2018, the cost of federal individual mandate penalties were subtracted from the state’s individual mandate, so people didn’t have to pay both penalties if they were uninsured in Massachusetts. But starting in 2019, the state’s penalty will apply in full. 2018 penalty amounts for Massachusetts are available here.

Massachusetts is penalizing employers if employees get MassHealth or ConnectorCare coverage

In an effort to offset the financial impact of employers shifting the cost of health care onto the state, and to help cover the state’s increasing Medicaid expenses, Massachusetts enacted H.3822 in 2017. The legislation imposes a financial penalty on employers if they have employees who enroll in MassHealth (Medicaid) or ConnectorCare (state-subsidized health insurance available through the exchange). The penalty is called the Employer Medical Assistance Contribution Supplement, or EMAC Supplement, and has been implemented for 2018 and 2019.

The EMAC Supplement is collected as a line item on the employer’s quarterly unemployment contributions (starting with the April 2018 contribution), and is equal to 5 percent of the wages of the employee who enrolled in MassHealth or ConnectorCare, although there’s a cap on the penalty of $750 per year, per employee. The EMAC Supplement applies to employers with six or more employees — a far lower threshold than the ACA’s employer mandate, which only requires employers to offer health coverage if they have 50 or more employees.

To be clear, the new Massachusetts rule does not require small employers to offer coverage. But it charges them an assessment (smaller than the ACA’s employer-mandate penalty, but not insignificant) if their employees have income that makes them eligible for MassHealth or ConnectorCare. To avoid the EMAC Supplement charge, the employer can either boost wages or offer affordable coverage.

If an employer offers affordable, minimum value coverage and the employee rejects it, the employee would not be eligible for ConnectorCare, since that coverage isn’t available to people who have access to an affordable employer-sponsored plan that provides minimum value. But a person whose income is low enough to qualify for MassHealth is eligible regardless of access to employer-sponsored coverage, so an employee whose wages are low enough to qualify for MassHealth would trigger the employer penalty under the new EMAC Supplement system.

The EMAC Supplement charge does not apply to employees who earn less than $500 in wages during the quarter, and it also does not apply to disabled workers. It also does not apply if an employee obtains coverage via the Massachusetts exchange and qualifies for only ACA-premium subsidies. Those subsidies are provided by the federal government. But ConnectorCare subsidies are provided by the state, and the EMAC Supplement is intended to defray some of the state’s costs.

Incidentally, a 2013 report that listed employers with more than 50 employees receiving state-subsidized coverage under safety-net health plans (mostly MassHealth) indicated that the Commonwealth of Massachusetts was the employer with the highest number of employees receiving state-subsidized coverage, followed by S&S Credit Company and then WalMart.

In addition to the EMAC Supplement that applies if employees are enrolled in MassHealth or ConnectorCare, H.3822 also temporarily increases the existing EMAC (which has been in place since 2014) from a maximum of $51 per employee per year to a maximum of $77 per employee per year. This fee applies to employers with six or more employees, regardless of whether employees are enrolled in state-funded health care programs, and regardless of whether the employer offers coverage. The temporary increase applies in 2018 and 2019. There is expected to still be a budget shortfall for MassHealth, even with the higher EMAC and EMAC Supplement revenue.

Year-over-year enrollment up 2.4% in 2018, despite shorter open enrollment period

Open enrollment for 2018 coverage ran from November 1, 2017 to December 15, 2017 in states that use HealthCare.gov. But most states that run their own exchanges, including Massachusetts, opted to extend open enrollment for 2018 coverage. In Massachusetts, open enrollment continued until January 23, 2018, so it ended up being only a week shorter than it had been for 2017 coverage.

On November 20, Massachusetts Health Connector published a press release with enrollment data from the first 15 days of open enrollment for 2018 coverage. 26,343 people had selected a plan for 2018 and made their first premium payment by November 15, versus 18,695 in the first 15 days of November 2016

Ultimately, the Health Connector ended up with 270,688 enrollees for 2018, about 1.5 percent higher than the 266,664 people who had purchased plans during the open enrollment period for 2017 coverage.

And effectuated enrollment as of February 1, 2018 stood at 252,786, up from 246,831 on February 1, 2017, or about a 2.4 percent increase.

Massachusetts is one of two states (the other is Rhode Island) where the 23rd of the month is the normal deadline for a first of the following month effective date (in the rest of the states, the deadline is the 15th of the month). So Massachusetts residents had until December 23 to enroll in a plan with a January 1, 2018 effective date. And those who enrolled between December 24 and January 23 had coverage effective February 1..

Minuteman Health in receivership, not offering plans for 2018

The ACA’s CO-OP program has been bumpy, to put it mildly. Out of 23 CO-OPs that got off the ground during the first open enrollment period in 2013, only four are still functional. There were five in 2017, but Minuteman Health — which operated in Massachusetts and New Hampshire — closed at the end of 2017.

Due to financial instability, which Minuteman Health noted was due in part to the way the ACA’s risk adjustment program allocated money and the shortfall in risk corridor payments, the CO-OP announced in June 2017 that they would stop offering plans at the end of 2017, but their intention at that point was to reopen as a for-profit insurer in 2018.

In mid-August, however, it became apparent that Minuteman would not be able to reopen as a for-profit insurer in 2018, because they had not raised enough capital by the August 16 deadline to get licensed as a new insurer. As a result, Minuteman Health enrollees in Massachusetts and New Hampshire had to switch to new plans for 2018, and did not have an opportunity to buy a for-profit version of Minuteman coverage.

In 2016, Minuteman owed $16.7 million in risk adjustment payments to CMS (for their New Hampshire business; Massachusetts operates its own risk adjustment program), and filed a lawsuit in July 2016 to bring about immediate changes to the risk adjustment program, but a judge ruled in early 2018 that HHS had correctly implemented the risk adjustment program, within the scope of the agency’s authority. Minuteman filed another lawsuit in October 2016, over the risk corridor shortfall, as they claimed they were owed $5.5 million under the risk corridor program (this is true of many carriers, as the program has faced significant shortfalls due to the fact that it was retroactively — at the end of 2014 — made budget-neutral).

CeltiCare Health also exited the exchange; 8 insurers remaining

A July 2017 Health Connector memo indicated that CeltiCare (Ambetter) would not participate in the individual market in Massachusetts in 2018. But Massachusetts Health Connector’s July enrollment report noted that CeltiCare had zero percent of the QHP and small group enrollments in 2017, and just 1 percent of the ConnectorCare enrollments. So their departure did not have a significant impact.

The July board memo indicated that Minuteman Health would return as a for-profit called Minuteman Insurance Company, but that plan was scuttled in August, as described above.

The other eight insurers (all except Minuteman and CeltiCare) filed plans for 2018 exchange participation, and the exchange board recommended that plans from all eight insurers be offered by the exchange (rate filings for Neighborhood Health Plan were not among the rest of the Massachusetts filings, but their plans are available in 2018 in the Massachusetts Health Connector).

Massachusetts Health Connector confirmed in 2017 that CelticCare and Minuteman enrollees would be mapped to comparable plans from other insurers if they didn’t return to the exchange to pick a new plan by December 23, 2017. The exchange indicated that these members would not have a special enrollment period due to loss of coverage, but noted that open enrollment would continue until January 23 for everyone, allowing people who were mapped to new plans the opportunity to pick a different plan after the start of the year.

However, since CeltiCare and Minuteman left the full individual market, any of their members who had off-exchange coverage in 2017 were eligible for a special enrollment period (SEP) triggered by loss of coverage. This SEP allowed these members to select a new plan — on or off-exchange — as late as December 31 and still have coverage effective January 1. And the SEP continued until March 1, 2018, although enrollments completed after December 31 resulted in a gap in coverage, since off-exchange enrollees whose plans ended were uninsured as of January 1 if they didn’t pick a new plan by December 31; plans selected after December 31 had coverage effective in February at the earliest.

2018 rates and insurers: Cost of CSR was added to silver plan premiums for 2018

As of October 12, Massachusetts Health Connector intended to implement premiums for 2018 that were based on the assumption that cost-sharing reduction (CSR) funding would continue in 2018. The average rate increase at that point was just 8.7 percent.

But it was later that same day that the Trump Administration announced that CSR funding would end immediately. Suddenly, insurers in states that had taken Massachusetts’ approach (assuming CSR funding would continue) were left scrambling to sort out their path forward. In nearly every state, the eventual result was that the cost of CSR got added to 2018 premiums (typically just to silver plan premiums, as CSR benefits only apply to silver plans).

Massachusetts did ultimately allow insurers to add the cost of CSR to silver plan premiums for 2018. The result is that silver plan premiums increased by an average of 26 percent in Massachusetts, instead of the 10.5 percent average increase they would have otherwise had. Overall, the average rate increase across all plans was 18 percent, driven in large part by the spike in silver plan rates.

Five of the eight returning exchange insurers added the cost of CSR to their silver plan premiums for 2018, resulting in the following overall average rate increases:

BMC HealthNet Plan (BMCHP): 28.8 percent. The average rate increase would have been 9.7 percent if CSR funding had continued.
Fallon Community Health Plan: 16.8 percent. The average rate increase would have been 9.8 percent if CSR funding had continued.
Health New England (HNE): 12.4 percent. The average rate increase would have been 6.8 percent if CSR funding had continued.
Neighborhood Health Plan (NHP): 23.4 percent. The average rate increase would have been 16.9 percent if CSR funding had continued.
Tufts Health Plan – Direct:19.9 percent. The average rate increase would have been 5.3 percent if CSR funding had continued (with 33 percent of the projected QHP enrollments, Tufts Direct, aka Tufts Health Public Plans, has the exchange’s largest market share)

There are three additional insurers that offer plans through Massachusetts Health Connector but that do not participate in the ConnectorCare program. As a result, they do not offer plans with CSR benefits, since CSR eligibility only applies to people who have ConnectorCare coverage (CSR eligibility extends to 250 percent of the poverty level, while ConnectorCare eligibility extends to 300 percent of the poverty level; everyone who gets CSR benefits is also in the ConnectorCare program).

So those three Massachusetts exchange insurers did not have to add the cost of CSR to their premiums for 2018, since they don’t provide CSR benefits to their enrollees. Their average rate increases remained unchanged when the cost of CSR was added to 2018 premiums in mid-October:

Blue Cross Blue Shield of Massachusetts (BCBSMA): 5.2 percent increase
Harvard Pilgrim Health Care (HPHC): 7 percent increase
Tufts Health Plan – Premier: 5 percent increase (also known as Tufts HMO)

It’s important to note that the effect of premium subsidies is not taken into consideration when looking at how much the rates change from one year to the next. The subsidies are designed to keep pace with the cost of the second-lowest-cost silver plan, which means that the higher-than-expected silver plan premiums resulted in particularly large premium subsidies for 2018.

So people who qualify for premium subsidies are largely protected from the added cost of CSR, since the subsidies are much larger in order to cover that cost. And when the subsidy is applied to a non-silver plan, it goes even further than it would have in prior years. People who don’t qualify for a premium subsidy are not insulated from the regular rate increases, since those apply to all plans. But they were able to avoid paying the cost of CSR by picking a non-silver plan or a silver plan from one of the insurers that didn’t add the cost of CSR to 2018 premiums.

Partnering with DC Health Link for SHOP exchange platform that debuted in August 2017

On February 23, 2017, DC Health Link, the state-run exchange in the District of Columbia, announced that they would be partnering with Massachusetts Health Connector, so that small businesses in Massachusetts would be able to use DC Health Link’s SHOP (small business exchange) enrollment platform.

The new website, which uses a separate branch of DC Health Link’s SHOP exchange platform, launched in August 2017, with plans available from Boston Medical Center Health Plan, Fallon Health, and Health New England. Additional insurers will be added in November for small businesses that are selecting coverage for January 2018, and existing groups enrolled in Massachusetts SHOP plans will use the new platform to renew their coverage starting in the fall of 2018.

In March 2018, Massachusetts Health Connector began a partnership with the New England Business Association, to make health coverage more accessible to small businesses.

2017 enrollment

At the start of the 2017 open enrollment period (which ran from November 1, 2016 to January 31, 2017), effectuated enrollment in the Massachusetts Health Connector stood at 233,536. That included more than 180,000 people who were enrolled in ConnectorCare. ConnectorCare enrollment continues year-round, so the Massachusetts Health Connector — unlike most other exchanges — does not tend to experience a decline in effectuated enrollment as the year goes on.

By February 1, 2017, enrollment had grown to over 246,000 people who had paid their premiums and activated coverage for 2017 (Massachusetts Health Connector does not report enrollments until premiums have been paid). As of February 19, ACA Signups reported that Massachusetts Health Connector enrollment had reached nearly 265,000. The exchange reported that 54,000 of their enrollees for 2017 were new to the exchange, and 88 percent of their 2016 enrollees had maintained coverage through the exchange, either renewing their plan or switching to a different exchange plan during open enrollment.

Massachusetts Health Connector and the Trump Administration

The future of the ACA is uncertain under the Trump Administration and a Republican Congress. House Republicans passed the AHCA in May 2017, but Senate Republicans failed to pass three different versions of the legislation in July, stalling health care reform before the Senate recess.

But the Trump Administration has taken some actions that have been clearly destabilizing in terms of individual health insurance markets nationwide. Trump’s day-one executive order instructing federal agencies to be as lenient as possible in terms of ACA penalties has weakened the individual mandate, which in turn has a destabilizing effect on insurance markets (healthy people are less likely to enroll, while sick people will keep their coverage). And the Trump Administration has refused to commit to ongoing funding for the ACA’s cost-sharing reductions, which is driving premiums higher in many states than they would otherwise be for 2018 (the rates that have been filed in Massachusetts for 2018 are based on the assumption that cost-sharing reduction funding will continue, but they would have to be modified if that’s not the case).

Since Massachusetts implemented health care reform (aka RomneyCare) before the ACA was enacted, there are state-based regulations that would remain in place even without the ACA. But the state’s approach has been substantially adapted over the years to work with the ACA, and there’s a significant amount of federal funding for MassHealth (Medicaid) and private exchange plans (the state pays ConnectorCare subsidies, but ACA subsidies are also paid for enrollees with income between 138 percent and 400 percent of the poverty level).

But a May 2017 Urban Institute analysis of the AHCA found that the AHCA would have reduced federal Medicaid funding in Massachusetts by $1.4 billion by 2022, and driven the state’s uninsured rate up to more than 10 percent, from its current low of 2.8 percent (the lowest in the nation). The newly uninsured would have been a combination of 355,000 people projected to be dropped from MassHealth (Medicaid), and 90,000 people who currently have private plans in the exchange but whose premiums would have become unaffordable under the AHCA.

For the time being, however, nothing has changed. Open enrollment has ended, but coverage for 2017 is still available to people who experience qualifying events (regardless of pre-existing conditions), and subsidies are available through the exchange for those who are eligible based on their income. Open enrollment for 2018 coverage will begin on November 1, 2017, and will continue until December 15, 2017.

ConnectorCare

ConnectorCare plans are qualified health plans (QHPs), but they have year-round enrollment (albeit with limitations). ConnectorCare plans qualify for the federally-funded ACA premium tax credits, but they’re also subsidized by the state, resulting in even lower premium and out-of-pocket costs for eligible residents. ConnectorCare plans are available to enrollees with incomes up to 300 percent of the poverty level, and there are three different plan levels depending on enrollees’ income level.

Although MassHealth (Medicaid) enrollment is available year-round to any applicant who’s eligible for coverage, ConnectorCare is only available outside of open enrollment if the enrollee is either newly eligible (ie, didn’t qualify for ConnectorCare in the past) or hasn’t previously applied.

ConnectorCare is essentially the ACA-compliant replacement for Massachusetts’ pre-ACA Commonwealth Care program. Commonwealth Care also provided state-subsidized coverage for residents with incomes up to 300 percent of the poverty level, but it was scheduled to terminate at the end of 2013 and be replaced with ConnectorCare. Due to technological problems, the transition was delayed until 2015. Commonwealth Care was closed to new enrollees as of the end of 2013, but it continued to provide coverage for existing members until January 31, 2015. Commonwealth Care members needed to transition to ConnectorCare or another program (depending on eligibility) as of February 2015. The Commonwealth Care program’s regulations were officially repealed by the Massachusetts Health Connector’s board during their June 2015 meeting.

Less “premium smoothing” in 2017

Massachusetts has had an individual mandate for the last decade, and also provides premium subsidies (via state and federal funding for the ConnectorCare program) in addition to the federal subsidies provided under the ACA, to “smooth out” the differences in premiums from one plan to another. The ramped-up subsidies in the ConnectorCare program are available to enrollees with income up to 300 percent of the poverty level,

Those subsidies are smaller in 2017 however, and people who are enrolled in the highest-cost plans are no longer receiving the level of ConnectorCare subsidies they received in the past. In a September Health Connector board meeting, this issue was explained in more detail: essentially, the larger spread of premiums for 2017 meant that the cost of “smoothing” premiums would have been excessive, and would “reward behavior in the market that is not competitive.”

In 2016, the cost of premium smoothing was $20 million. But with the large rate increases for some carriers in 2017, the cost of smoothing was going to run to $51 million if it was done without any changes from 2016. Adding to the problem is the fact that available funding for 2017 is much lower than it was in 2016, and only $4.2 million is available.

The result of all this is that the additional subsidies for ConnectorCare plans is concentrated on lower-cost plans for 2017. ConnectorCare premiums are being “smoothed” (ie, eliminated) for plans that are within $35/month of the lowest-cost plan, but not beyond that.

So while people on the lower end of the income scale were able to pick any ConnectorCare plan in 2016 without paying a premium, they have to pay a premium in 2017 if they select one of the more expensive plans (premiums for people in ConnectorCare Plan Type 1 — for the lowest-income enrollees — vary from $0 to $165/month in 2017, depending on the plan they select). This highlights the importance of shopping around and possibly switching to a different plan for 2017.

ConnectorCare special enrollment period

Due to the increasing premiums for some ConnectorCare enrollees, the exchange created a special enrollment period (SEP) for all ConnectorCare enrollees, throughout the month of February 2017. Until February 28, ConnectorCare enrollees were able to switch to a different plan using this SEP. This was important, because it gave people — who may not have been fully aware of the premium increases for 2017 — additional time to compare options and pick a new plan after seeing the premiums they were charged in January.

After the SEP ended on February 28, ConnectorCare enrollees may only switch plans if they experience a qualifying event.

2017 plan availability

There are 62 individual and small group plans available through Massachusetts Health Connector for 2017 (availability varies by area). The exchange had 84 available plans in 2016, and 126 in 2015. The exchange uses an active purchaser model, and has noted in the past that they’ve worked to trim down the total number of plans so as to provide a shopping experience that isn’t overwhelming, and to avoid duplicate offerings of very similar plans (more details below).

UnitedHealthcare exited the individual market in Massachusetts at the end of 2016, but they covered just one percent of the exchange’s enrollees in 2016. Dental carriers Guardian and MetLife exited the exchange at the end of 2016, but they only offered group dental coverage, rather than individual market coverage.

Plans are available in 2017 from the following carriers:

Ambetter (CeltiCare)
Blue Cross Blue Shield of Massachusetts HMO Blue
Blue Cross Blue Shield of Massachusetts
Boston Medical Center HealthNet Plan
Fallon Community Health Plan
Harvard Pilgrim Health Care (HMO)
Health New England
Minuteman Health (an ACA-created CO-OP)
Neighborhood Health Plan
Tufts HMO
Tufts Insurance Company

77 percent of the 2016 market share in Massachusetts Health Connector was with Neighborhood, Tufts, Harvard Pilgrim, and BMC HealthNet.

Neighborhood, which insured one out of four Connector enrollees and offers a generous network of providers in Boston, raised its rates by an average of 21 percent for 2017 (before any subsidies are applied). But for another quarter of the people enrolled in Connector plans, rates for 2017 decreased or remained unchanged, thanks to minimal rate changes for some of the other carriers.

The rate increases for 2017 were highest for Harvard Pilgrim, Health New England, and Neighborhood Health Plan. Those three carriers had 46 percent of the 2016 exchange market share as of early November 2016.

For people with income above 300 percent of the poverty level (who don’t qualify for ConnectorCare subsidies), average premiums increased by 19 percent. That assumed, however, that people kept their existing plans in 2017. In reality, there was a much higher rate of plan switching during the 2017 open enrollment period: 65,000 Massachusetts Health Connector enrollees picked new plans for 2017, which was roughly four times the percentage of plan changes that the exchange had seen in prior years.

Overall, the average rate increase in Massachusetts was lower than the national average.

ConnectorCare eliminates copays for addiction treatment

Starting in 2017, people who have ConnectorCare health insurance plans through Massachusetts Health Connector no longer have to pay copays if they need outpatient substance abuse treatment or medications, including Methadone and Suboxone.

The new rules do not apply to people who pay full-price for their coverage, or for those with income between 300 and 400 percent of the poverty level, who qualify only for the ACA’s subsidies, but not ConnectorCare. But more than three-quarters of the Massachusetts Health Connector’s enrollees are in ConnectorCare plans.

Nearly 233k enrolled for 2016 – and effectuated – by November

Massachusetts Health Connector set a goal of 190,000 qualified health plan (QHP) enrollments during the 2016 open enrollment period, including renewals. By the time open enrollment ended on January 31, they had exceeded that goal, with 196,554 enrollees.

The official report from HHS put the total at 213,883 as of February 1, but that’s because HHS counts all plan selections, regardless of whether the applicant has paid for their plan and effectuated their coverage; the Massachusetts Health Connector reports only include enrollments that have been effectuated (for 2016, HHS did begin subtracting cancelled/terminated enrollments, but that only happens once the initial premium is past-due; a plan selection with a premium not yet due but also not yet paid would be counted by HHS, but not counted in the Massachusetts Health Connector report).

By February 8, total enrollment had grown to 201,345, including 36,000 new enrollees and a retention rate of 94 percent among 2015 enrollees. All of them had paid their initial premiums, as Massachusetts Health Connector only reports effectuated enrollment numbers. By April 30, 2016, total enrollment in QHPs (according to the Health Connector’s report) stood at 214,894. That was slightly lower than the total as of March, but about 9 percent higher than the total at the end of January. For comparison, HHS reported that effectuated enrollment through Massachusetts Health Connector stood at 207,121 as of March 31.

By June 2, 2016, effectuated enrollment in QHPs stood at 223,778. By November 2, 2016, that had increased to 233,536.

The majority – almost 182,000 – of the people who had enrolled in QHPs by November were enrolled in ConnectorCare, which is a unique program in Massachusetts that provides state subsidies in addition to federal ACA subsidies for people with income up to 300 percent of the poverty level. ConnectorCare enrollment continues year-round, unlike regular QHP enrollment that ended on January 31.

In addition to the ConnectorCare enrollments, 8,934 enrollees qualified for ACA subsidies for 2016 by the beginning of November (which means their income was between 300 percent and 400 percent of the poverty level), while the other 42,911 enrolled in QHPs with no subsidies at all (ie, their income was over 400 percent of the poverty level, or the enrollees opted to pay full price and claim the subsidy on their tax return instead of taking it throughout the year).

2016’s enrollment is particularly impressive given the technology problems that plagued the Massachusetts Health Connector during the first two open enrollment periods. Clearly, the exchange has turned a corner and is working much better than it was in the past.

Residents in Massachusetts have until January 23rd of the month to enroll in a plan with an effective date the first of the following month (Massachusetts is one of three states where the deadline is after the 15th every month).

Improvements for 2016

Massachusetts’ 2006 health reform formed the framework on which the ACA was built, and the Massachusetts Health Connector was operating as a health insurance exchange long before the exchanges in the rest of the country came online. But aligning the Connector with the ACA was fraught with technological difficulties during the first two years. However, Massachusetts and the federal government have spent $285 million to repair and rebuild the exchange, and the result was a much better third round of open enrollment.

Renewal for enrollees who didn’t make changes to their plan was much faster than it was for 2015, and the exchange also added online accessibility for payment and change of circumstances requests – those features were previously only available by calling the help center. Call center hours were extended for open enrollment, and staffing was increased to more than 300 call center representatives.

For the third open enrollment period, the Connector’s goal was to keep hold times to less than two and a half minutes for at least 70 percent of their calls. Clearly, they succeed on that front: The average call to the Connector call center was answered in just 8 seconds during November 2015, and peaked at about two and a half minutes in January 2016 – a dramatic improvement over the 28 minute hold time that callers experienced in February 2015, towards the end of the second open enrollment period.

The exchange also added four new walk-in centers (Brockton, Fall River, Lowell, and Springfield) to handle open enrollment volume, in addition to the existing walk-in locations in Worcester and Boston.

Massachusetts Health Connector also partnered with Consumers’ Checkbook to create a provider search tool that enrollees can use without leaving the Connector website (initially, the provider tool only includes physicians, but future versions of the search tool will also include behavioral health specialists). Prior to the 2016 open enrollment period, enrollees had to leave the Connector site and use the network search tools provided by each insurer – a cumbersome process at best – to make sure their doctors were in the network of the plans they were considering.

According to Gallup data, the uninsured rate in Massachusetts was only 3 percent during the first half of 2015; only Rhode Island had a lower uninsured rate, at 2.7 percent. But healthcare costs continue to outpace inflation in Massachusetts and one out of six residents reported doing without healthcare because of the cost. And although the long term uninsured rate is very low, 13.6 percent of Massachusetts residents were uninsured for at least a portion of 2015.

Standardized plans

Massachusetts Health Connector offers both standardized and non-standardized plans from which enrollees can select. The standardized plans have the same out-of-pocket costs (within a metal level) for nine benefit categories (eg. deductible, out-of-pocket maximum, office visit, emergency room, etc.), although standardized plans can vary significantly in terms of premiums, provider networks, and cost-sharing for benefits outside those nine categories.

Massachusetts carriers can – and do – also offer non-standardized plan designs that comply with the ACA’s requirements but have different out-of-pocket costs for the nine benefit categories that apply to standardized plans.

On a related note, HHS has created six standardized benefit designs for plans sold through the federally-facilitated marketplace (Healthcare.gov), which are optional for insurers in 2017. To see Healthcare.gov’s standardized plan designs, see page 309-310 in the 2017 Benefit and Payment Parameters.

Fewer plans – by design

Massachusetts Health Connectors is an active purchaser which means that the exchange sets criteria for participating health plans, negotiates with insurers, and ultimately decides which health plans will be for sale through the exchange (some states have clearinghouse exchange models instead, which means the exchange accepts all plans that meet the QHP guidelines). As an example, the Connector requires each participating carrier to offer plans at all four metal levels; the ACA only requires exchange carriers to offer at least one gold plan and one silver plan.

The exchange utilized its active purchaser role for 2016 to limit the number of available plans. For 2015, there were 126 plans are available, and the Connector said that would decrease to 81 or fewer for 2016. The exchange felt the previously-available plethora of plan options – often with only minor differences from one plan to another – made the selection process too confusing for enrollees. The same carriers are participating in the exchange though: In 2015, there were 11 participating carriers; that has fallen to 10 for 2016, but only because Network Health is now part of Tufts Health Plan.

About 16,500 people were enrolled in Connector plans in 2015 that aren’t available in 2016 due to the reduction in plans. Roughly half of those people were able to keep their coverage (although new enrollees can no longer purchase the plans), but the other half had to switch to one of the other available options during open enrollment. The move to simplify plan offerings was met with mixed opinions from board members and stakeholders.

2016 rates: average increase 6.3%

Healthcare.gov has a rate review tool that allowed consumers see proposed rate increases of ten percent or more, starting in June 2015. Massachusetts had a very large number of plans that proposed double digit rate hikes for 2016 – the list extended to 14 pages, which is far longer than average. However, not all of those plans are sold on the exchange, and the list included small group plans as well as individual plans.

For individual coverage within Massachusetts Health Connector, only three carriers – Health New England, Fallon Health & Life, and Minuteman proposed double digit rate hikes for 2016. There are eleven carriers that offer plans through the Connector, and the majority of them proposed rate changes of less than ten percent for 2016. At the end of August, Massachusetts regulators announced that the average rate increase in the individual and small group market would be 6.3 percent for 2016 – well under the 12 to 13 percent nationwide average (Massachusetts and Vermont are the only two states where the individual and small group risk pools have been merged. DC also has a modified merged risk pool).

Although Massachusetts has a lower overall average rate increase than many states for 2016, it is still significantly higher than it was the year before. In 2015, the average rate increase for Connector plans was only 1.6 percent.

2015 enrollment data

About 125,000 people enrolled in qualified health plans (QHPs) and about 286,000 people enrolled in MassHealth (Medicaid) through the Health Connector during 2015 open enrollment. By the end of March, 124,010 people had effectuated QHPs through the Health Connector, and that number had grown to 165,922 by the end of June.

While most states see gradual attrition from the QHP market outside of open enrollment, Massachusetts increased their effectuated QHP enrollment by nearly 34 percent during the second quarter of 2015, mostly due to the fact that ConnectorCare enrollment continues year-round, but counts as QHPs. By September, effectuated enrollment had reached 179,470, and had climbed further to roughly 182,000 by the end of October. The exchange also had about 45,000 people enrolled in dental coverage.

A high-performing state, but still room to improve

The National Health Council issued a progress report in July 2015 analyzing how states have improved their health insurance markets to be more patient-centered and focused on the ACA’s goals of expanding access to quality, affordable health care. Massachusetts is one of only seven states that scored highly on at least 2 out of 5 metrics on an analysis of how well the state has implemented five “patient-focused principles” to protect consumers in the exchange. Massachusetts scored highly on continuity of care and state oversight, but received average scores for uniformity of exchange plans, transparency, and non-discrimination.

Although Massachusetts is clearly near the top in terms of patient protections, the National Health Council report provides some feedback for ways that the state and the exchange could better serve their population.

2015 open enrollment

Massachusetts was one of two states (the other was Oregon) where 2014 enrollees had to re-enroll for 2015 in order to keep their coverage (in a few other states – Idaho, Maryland, and Nevada – consumers needed to re-enroll for 2015 in order to keep their subsidies). This was because of technology problems in 2014 that resulted in about 200,000 people being placed temporarily (through December 31, 2014) on MassHealth (Medicaid). In order to deal with the problems, the exchange switched to a platform created by hCentive for the second open enrollment period, but the technology change meant that everyone needed to re-enroll – including those who weren’t eligible for subsidies and weren’t enrolled in the temporary coverage through MassHealth.

MassHealth also had to verify eligibility for 1.2 million of its 1.9 million enrollees (the other 700,000 had enrolled recently enough that their eligibility was current). Enrollees had to update their information in order to renew their benefits, and by May 2015, the program had disenrolled 158,000 people – out of 500,000 – who hadn’t responded to the state’s information requests. The state began combing through the next round of 500,000 enrollees in July, making sure that they’re still eligible to remain on MassHealth.

Massachusetts is among three states (Idaho and Colorado are the other two) where there was no special enrollment period in 2015 for people who were unaware of the tax penalty for being uninsured. It’s unlikely that there were many people in Massachusetts in that position, given that state law has imposed a similar tax penalty for the last several years.

Leadership changes

Gov. Charlie Baker was sworn into office in January 2015, and he moved quickly to bring change to the Health Connector leadership ranks. Baker is a Republican, and was formerly the CEO of Harvard Pilgrim Healthcare. During Baker’s campaign for governor, he was critical of the Connector’s botched roll-out, and felt that Massachusetts should have more waivers from the ACA, given that the state had already implemented successful healthcare reform.

In late January, Baker appointed Louis Gutierrez to replace Jean Yang as the executive director of the Health Connector. Gutierrez was most recently a principal at the Exeter Group, an IT consulting firm. He’s also served as the state’s chief information officer in several administrations and was senior vice president and chief information and technology officer at Harvard Pilgrim Health Care.

Baker also shook up the 11-member Health Connector board of directors. Two members of Baker’s cabinet are board members: Marylou Sudders, who is the Secretary of Health and Human Services, and Kristen Lepore, who is the Secretary of Administration and Finance. In late February, Gov. Baker asked four Health Connector board members, all appointed by former Gov. Deval Patrick, to resign (Jonathan Gruber was among them). In calling for the resignations, Baker cited the poor performance of the Health Connector in 2014 as well as ongoing issues and said he wanted his own team in place to make further fixes.

In March 2015, Baker appointed replacements for two of the four open board seats, and in April he appointed replacements for the remaining two seats. Including his two cabinet members, Baker has named six of the 11 board members.

Health Connector 2014 enrollment counts

The Health Connector reported that it enrolled 308,000 people into coverage in 2014, although most were enrolled in temporary MassHealth coverage. Given that the Health Connector was set up several years before the ACA was passed, many of the 308,000 were already in one of several state-sponsored programs. The final HHS 2014 enrollment report put Massachusetts’ enrollment in qualified health plans (QHPs) at 31,695.

Of the 308,000 enrollments reported by the Health Connector, about 271,000 were for subsidized coverage and about 37,000 were for unsubsidized coverage. The subsidized figure includes more than 200,000 people who were given temporary coverage through MassHealth (Medicaid) while technological problems were addressed. The subsidized figure also includes residents who were shifting from existing state-sponsored programs to new or different programs that are aligned with ACA’s eligibility standards.

Coverage for small businesses

The SHOP exchange for small businesses in Massachusetts offers plans from eight carriers in 2016: Blue Cross Blue Shield of Massachusetts, Ambetter/CeltiCare Health Plan, Fallon Community Health Plan, Harvard Pilgrim Health Care, Health New England, Minuteman, Neighborhood Health Plan and Tufts Health Plan. Five carriers offer dental coverage for small businesses: Altus Dental, Delta Dental, Dental Blue, Guardian Dental, and Metlife.

The Massachusetts Health Connector’s small business exchange offers plans to employers with up to 50 employees. The ACA had called for the definition of “small group” to expand to include groups with up to 100 employees starting in 2016, and Massachusetts had issued guidance allowing groups with 51 – 100 employees to early-renew their plans at the end of 2015 to avoid rate hikes in 2016 under the new regulations. But in October 2015, President Obama signed HR1624 (the PACE Act) into law, repealing the ACA’s small group definition change, but leaving the final decision up to each state. Massachusetts is keeping their small group definition at 50 or fewer employees, and the day after HR1624 was enacted, the state rescinded their guidance that allowed mid-size groups to early renew.

Massachusetts allows small group health insurance carriers to use rating factors that are not permitted by the ACA. But the state has obtained transitional waivers that allow them to continue to use the rating factors for the time being. In June 2015, Governor Baker’s administration obtained another waiver from HHS that will allow the small group market to continue to use two thirds of the rating factors throughout 2016. That will be reduced to one third in 2017, and the rating factors will be eliminated in 2018.

History of Massachusetts Health Connector

Massachusetts enacted comprehensive health reform in 2006 that created the Massachusetts Health Connector. Massachusetts’ reforms served as the model for the federal Affordable Care Act (ACA), which was signed into law in 2010. As a result of Massachusetts’ early health care reform efforts, the state’s uninsured rate had dropped from 10.9 percent in 2006 to 6.3 percent in 2010 – in contrast to the overall uninsured rate in the US, which climbed during that time period.

While the ACA health insurance marketplaces were modeled on the Massachusetts exchange, the technical upgrades that were needed to make Health Connector ACA-compliant were not implemented smoothly or on time.

The Health Connector performed very poorly during the first ACA open enrollment period. Health Connector hired a consultant, MITRE Corporation, to assess its website problems. MITRE determined that CGI — the lead IT vendor — lacked necessary expertise, managed the project poorly, lost data, and failed to adequately test the revamped website prior to its launch. MITRE also said the roles and decision-making authority of the three state entities involved in the project (Massachusetts Health Connector, MassHealth, and the University of Massachusetts Medical School) were unclear.

Despite the issues with CGI, state officials deemed it too disruptive to cut ties with the vendor during the 2014 open enrollment. In January 2014, Massachusetts brought on Optum, a subsidiary of United HealthGroup, to work through some of the immediate problems with the Health Connector. When 2014 open enrollment ended, Health Connector officials moved to terminate the CGI contract.

The Health Connector struggled with technological problems during 2014 open enrollment, and officials spent the spring and summer evaluating whether to fix the state’s system or transition to HealthCare.gov.

Massachusetts officials pursued a “dual track” solution to make the Health Connector work better for the 2015 open enrollment period. One track evaluated replacing existing Health Connector software with hCentive, an off-the-shelf software solution that was successfully used by the Colorado, Kentucky, and New York exchanges. The second track considered was transitioning to the federal exchange, HealthCare.gov, for enrollment.

In July 2014, hCentive successfully demonstrated that it could connect to the federal data hub to verify applicants’ identifies and income levels. After additional testing in August, Massachusetts and CMS determined continuing as a state-run exchange using the hCentive platform was the right approach for the state.

The hCentive system has been customized for the Massachusetts insurance marketplace. It supports State Wrap, which provides additional state-sponsored premium assistance, as well as a “single door” enrollment for either private health insurance or MassHealth, the state’s Medicaid program. The hCentive system also includes functionality to better handle transactions between insurance companies and consumers and “back office” functions for insurers.

State officials put the cost of rebuilding Health Connector at $254 million, with the state paying $30 million and the federal government paying the balance (by October 2015, the total had reached $285 million). In addition, the state has paid $259 million in medical claims for people who were temporarily enrolled in MassHealth.

Health Connector performance was greatly improved in 2015. However, officials acknowledged many additional fixes were still needed, and consumers continued to struggle with the online payment system and long waits for customer assistance. Those issues appeared to have been mostly addressed by the start of the third open enrollment period, and the 2016 open enrollment period was dramatically more successful than the previous two.

Massachusetts health insurance exchange links

State Exchange Profile: Massachusetts
The Henry J. Kaiser Family Foundation overview of Massachusetts’ progress toward creating a state health insurance exchange.

Health Care for All – Massachusetts Consumer Assistance Program
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care.(800) 272-4232

Office of Patient Protection, Department of Public Health
800-436-7757 (toll-free nationwide)
Serves residents and other consumers who receive health coverage from a Massachusetts carrier, insurer, or HMO.

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SOURCE: http://www.healthinsurance.org/massachusetts-state-health-insurance-exchange/

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