Comprehensive Reform in Massachusetts: Commonwealth Care

Passed in 2006, Massachusetts' Commonwealth Care program has a goal of covering 95% of Massachusetts citizens by 2009.   Policy components focus on access and cost of coverage.

Governance:
Massachusetts Health Care Reform created the Commonwealth Health Insurance Connector Authority, to be operated as an Authority under the Department of Administration and Finance and overseen by a separate, appointed Board of private and public representatives.

Public-sector: Premium subsidies for lower-income (<300%)

• Commonwealth Care Health Insurance Program will provide free coverage for individuals with incomes below 100% FPL and sliding scale subsidies to individuals with incomes below 300% FPL
• The existing premium assistance program will raise eligibility for employee participation from 200% to 300% FPL
• Average monthly premiums for products offered through the Connector are expected to range between $276 and $391
• MassHealth expansion to cover children up to 300% of poverty and raise enrollment caps

Insurance Market:

• Individual mandate
  • All adults must purchase health insurance
  • Policy number recorded on annual tax forms
  • Penalty
    • loss of personal exemption on income taxes
    • fine equaling 50% of the monthly cost of health insurance for each month without insurance
  • Does not include children
• Insurance market reform to reduce premiums
  • Non-group and small group market merged reducing individual market premiums
  • HMOs allowed to offer plans that are linked to Health Savings Accounts (HSAs) and products with co-insurance
  • Carriers can offer products with fewer benefits to young adults ages 19-26

Employer-based:

• Fair Share Assessment (>10 workers)
  • Provide coverage or pay an assessment
  • Up to $295 annually per employee
• Free Rider Surcharge (>10 workers)
  • Employers w/uninsured workers using excessive use charity care
• All employers must offer a Section 125 "cafeteria plan" that permits workers to purchase health care with pre-tax dollars or face penalty

Other:

• Creation of Commonwealth Health Insurance Connector
  • "Connects" small businesses and individuals to low-cost, high quality insurance plans
  • Workers with multiple jobs  can pool employer contributions to purchase one plan
  • Insurance is portable across jobs
  • Offers a "bare bones" plan for young adults ages 19-26
• Financing strategies that include state, federal employer and individual support
• Safety Net Care Fund combines previous Free Care Pool funds with Medicaid funds to maintain safety net

Financing:

• $385 million a year federal matching funds redirected from funding the safety net and uncompensated to funding premium subsidies
• $308 million in state general fund revenue over three years
• Individual and employer contributions
• Redeploying existing funding makes the program financially sustainable

Eligibility:

• No premium for incomes under 100% FPL
• Premium subsidies available through Commonwealth Connector for those under 300% FPL
• MassHealth expansion:
  • All children up to 300% FPL
  • Senior and disabled legal immigrants who do not qualify for federal Medicaid reimbursement can receive Masshealth Essential benefits
  • HIV waiver program for persons up to 200% FPL

For more information: Commonwealth Connector website

Back to State Information