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Massachusetts health insurance marketplace

Connector opts for fewer plans in 2016; average rate increase 6.3%

  • By
  • contributor
  • October 31, 2015

A brighter outlook 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 last two years. However, Massachusets and the federal government have spent $285 million to repair and rebuild the exchange, and officials believe that round three will be much better.

Open enrollment begins November 1, although the Health Connector will be undergoing scheduled maintenance the night before open enrollment begins, and will not be available to use until 9am on November 1.

Renewal for enrollees who aren’t making changes to their plan will be much faster than it was last year, and the exchange has added online accessibility for payment and change of circumstances requests – those features were previously only available by calling the help center. Call center hours have been extended, and staffing has been increased to more than 300 call center representatives. For the third open enrollment period, the Connector’s goal is to keep hold times to less than two and a half minutes for at least 70 percent of their calls. There are also four new walk-in centers 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 will only include 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. Just prior to the start of the 2016 open enrollment period, effectuated enrollments through Massachusetts Health Connector stood at 182,000. Officials expect that number to reach 190,000 by the end of January, when open enrollment ends. The exchange also has about 45,000 people enrolled in dental coverage.

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 has utilized its active purchaser role for 2016 to limit the number of plans that will be offered.  For 2015, there were 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 there were in 2015. But the exchange said that they 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.

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.

The 11 carriers offering plans through the Connector include:

  • Ambetter (CeltiCare)
  • Blue Cross and Blue Shield of Massachusetts
  • Boston Medical Center HealthNet Plan
  • Fallon Community Health Plan
  • Harvard Pilgrim Health Care
  • Health New England
  • Minuteman Health
  • Neighborhood Health Plan
  • Network Health
  • Tufts Health Plan
  • United Healthcare

2016 rates: average increase 6.3% has a rate review tool that allowed consumers see proposed rate increases of ten percent or more, starting in June. 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 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 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 – well under the 12 to 13 percent nationwide average (Massachusetts is one of only two states – plus DC – where the individual and small group risk pools have been merged. Vermont also has a merged risk pool).

Although Massachusetts will see a lower overall average rate increase than many states in 2016, it will be 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 has increased their effectuated QHP enrollment by nearly 34 percent during the second quarter of 2015. By September, effectuated enrollment had reached 179,470, and had climbed further to roughly 182,000 by the end of October.

The increase in enrollment throughout 2015 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.

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.

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, 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.

Coverage for small businesses

The SHOP exchange for small businesses in Massachusetts offers plans from eight carriers: Blue Cross Blue Shield of Massachusetts, BMC HealthNet Plan, CeltiCare Health Plan, Fallon Community Health Plan, Harvard Pilgrim Health Care, Health New England, Neighborhood Health Plan and Tufts Health Plan.

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 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

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,, 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 inMassHealth.

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 appear to have been mostly addressed in time for the third open enrollment period.

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.