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Massachusetts health insurance exchange / marketplace

Connector will have fewer plans available in 2016; most exchange carriers propose rate hikes < 10%

A high-performing state, but still room to improve

The National Health Council issued a progress report in July 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 at least 2 out of 5 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.

And in terms of the Massachusetts Health Connector – the state-run exchange that pre-dates the ACA – there is also still room to improve.  The exchange is vastly better than it was during the first open enrollment period, but it’s estimated that fixing the remaining problems will cost another $47 million.  That brings the total cost of the Connector site (since it became ACA-compliant) to $281 million.  And a new payment tool and provider search tool (more details below) could push the total cost past $300 million.

Looking ahead to 2016

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 has utilized its active purchaser role for 2016, and there will be fewer available plans through the Connector when open enrollment begins on November 1.  Currently, 126 plans are available, and the Connector has said that will decrease to 81 or fewer for 2016.  There will still be 11 participating carriers, the same as this year.  But the exchange has said that they felt the current plethora of plan options – often with only minor differences from one plan to another – made the selection process too confusing for enrollees.

About 16,500 people are currently enrolled in Connector plans that won’t be available in 2016 due to the reduction in plans.  Roughly half of those people will be able to keep their coverage (although new enrollees won’t be able to purchase the plans), but the other half will need to switch to one of the other available options during open enrollment.  The move to simplify plan offerings has been met with mixed opinions from board members and stakeholders.

Massachusetts Health Connector is also partnering with Consumers’ Checkbook to create a provider search tool that enrollees will be able to use without leaving the Connector website.  Currently, enrollees must leave the Connector site and use the network search tools provided by each insurer – a cumbersome process at best – to make sure their doctors are in the network of the plans they’re considering.  The new provider search tool will be available in November when open enrollment begins.

Healthcare.gov has a rate review tool that lets consumers see proposed rate increases of ten percent or more, and Massachusetts has a very large number of plans that have proposed double digit rate hikes for 2016 – the list extends to 14 pages, which is far longer than average.  However, not all of those plans are sold on the exchange, and the list includes 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 – have proposed double digit rate hikes for 2016.  Those rates are currently under review, and could end up being adjusted before they’re finalized.  There are eleven carriers that offer plans through the Connector, so the majority of them have proposed rate changes of less than ten percent for the coming year.

In 2015, the average rate increase for Connector plans was only 1.6 percent.

Current 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 has increased their effectuated QHP enrollment by nearly 34 percent during the second quarter of 2015.

The increase in enrollment is largely due to the fact that ConnectorCare plans are 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 1.  The Commonwealth Care program’s regulations were officially repealed by the Massachusetts Health Connector’s board during their June meeting.

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.  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, the state’s Medicaid program, has 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 mid-May, 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.

Open enrollment for 2015 was scheduled to run from November 15 to February 15, but Massachusetts Health Connector extended the open enrollment period, giving residents until Feb. 23 to apply, select a health plan, and make their first premium payment. Massachusetts granted the extension because severe winter weather triggered periodic closures or staffing shortages at call centers and walk-in sites.

Massachusetts is among three states (Idaho and Colorado are the other two) where there was no special enrollment period 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 late March, 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. 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.

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 2014 open enrollment. In January, 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 early July, 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. In addition, the state has paid $259 million in medical claims for people who were temporarily enrolled inMassHealth.

Health Connector performance is greatly improved over 2014. However, officials acknowledge many additional fixes are still needed, and consumers continue to struggle with the online payment system and long waits for customer assistance.

Luis Gutierrez, who took over as Executive Director of the Massachusetts Health Connector in January, has said that improving the site is an ongoing effort, and although it will be better during the 2016 open enrollment that begins in November 2015, the problems that have plagued the site are not likely to be fully resolved by that point.

Massachusetts health insurance exchange links

Massachusetts Health Connector
877-MA-ENROLL (877-623-6765)

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.