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Massachusetts health insurance marketplace

Proposed average rate hike well below national average

  • By
  • healthinsurance.org contributor
  • August 21, 2016

Exchange eliminates copays for addiction treatment

Starting in 2017, people who have subsidized health insurance plans through Massachusetts Health Connectors will 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, but more than three-quarters of the exchange’s enrollees have subsidies.

Three carriers have 2/3 of exchange market

According to the June 2016 enrollment report for Massachusetts Health Connector, more than two-thirds of the exchange’s enrollees are covered by one of three health insurance carriers: Neighborhood Health Plan, Tufts Health Direct, and Harvard Pilgrim. The other eight carriers combined have just 32 percent of the exchange enrollees.

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

2017 rates and carriers

According to the Massachusetts Department of Insurance, the carriers that will offer plans through the Massachusetts exchange have requested the following rate changes for 2017:

  • Ambetter (CeltiCare): 6.6 percent increase
  • Blue Cross Blue Shield of Massachusetts HMO Blue: 6 percent increase
  • Blue Cross Blue Shield of Massachusetts: 8.2 percent
  • Boston Medical Center HealthNet Plan: 8.3 percent decrease
  • Fallon Community Health Plan: 1.3 percent (Rate proposals do not show up on the rate review page, but a representative at Fallon Health confirmed that the carrier will continue to offer individual market plans in Massachusetts in 2017, and the 1.3 percent requested rate increase for Fallon HMO was included in the proposed 2017 rates that the state Department of Insurance provided in August 2016).
  • Harvard Pilgrim Health Care (HMO): 15.2 percent increase
  • Health New England: 5.6 percent increase
  • Minuteman Health (an ACA-created CO-OP): 4.4 percent increase
  • Neighborhood Health Plan: 18.9 percent increase
  • Tufts HMO: 7.6 percent increase
  • Tufts Insurance Company: 7.4 percent increase

77 percent of the market share in Massachusetts Health Connector is with Neighborhood, Tufts, Harvard Pilgrim, and BMC HealthNet. Those four carriers have proposed rate increases that range from an 8.3 percent decrease, to an 18.9 percent increase.

Overall, the average proposed rate increase in Massachusetts is far lower than the national average.

Nearly 224k enrolled – and effectuated – by June

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, effectuated enrollment in QHPs stood at 223,778.

The majority – about 171,000 – of the people who had enrolled in QHPs by June 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, and is now only available for people who have a qualifying event.

In addition to the ConnectorCare enrollments, 8,564 enrollees qualified for ACA subsidies by the beginning of June (which means their income was between 300 percent and 400 percent of the poverty level), while the other 43,939 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.

Open enrollment for 2016 ended on January 31, but Massachusetts residents can still enroll if they experience a qualifying event. In addition, ConnectorCare enrollment continues year-round, as does Medicaid and CHIP enrollment – so anyone with income up to 300 percent of the poverty level can enroll at any time in Massachusetts. Enrollment growth after the end of January was due in large part to ConnectorCare enrollments. 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).

ConnectorCare

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 2015. The Commonwealth Care program’s regulations were officially repealed by the Massachusetts Health Connector’s board during their June 2015 meeting.

Minuteman Health among 7 remaining CO-OPs

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, only 7 are still functional. At the start of 2016, there were 11 functional CO-OPs remaining (four have since closed or announced impending closures) and only three of those 11 were not subject to increased oversight by state regulators. Minuteman Health – which operates in Massachusetts and New Hampshire – was among those three.

In late February 2016, Minuteman Health reported that their enrollment had grown by 70.1 percent over their enrollment total in 2015, and that their medical loss ratio is 88.7 percent – well over the threshold required by the ACA (80 percent, although there was some initial leeway for CO-OPs), but also solidly in financially sound territory. The majority of the CO-OPs – including Minuteman Health – had medical loss ratios of over 100 percent in 2014, meaning they paid out more in claims than they collected in premiums – before any admin expenses were taken into account.

Minuteman Health finished the first quarter of 2016 with positive net income, after losing $3.8 million in the first quarter of 2015. And at 3.43 percent, their proposed rate increase for 2017 is the smallest of all the carriers in Massachusetts.

Minuteman owes $16.7 million in risk adjustment payments to CMS (for their New Hampshire business; Massachusetts operates its own risk adjustment program), and has filed a lawsuit to bring about immediate changes to the risk adjustment program.

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, Massachusets 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 will be optional for insurers. 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.

The 10 carriers offering plans through the Connector in 2016 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
  • Tufts Health Plan
  • United Healthcare

Altus Dental and Delta Dental also offer stand-alone dental plans for individuals and families through Massachusetts Health Connector.

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 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 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

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.

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