In Massachusetts, ACA Marketplace enrollees with income up to 500% FPL get affordable platinum coverage

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A rickety but serviceable connector

In a two-year pilot program beginning in 2024, Massachusetts has extended eligibility for ConnectorCare, the state’s alternative to a standard ACA marketplace that features standardized plans with low out-of-pocket costs, to applicants with incomes up to 500% of the Federal Poverty Level (FPL), or $72,900 for an individual in 2024. Since the ACA marketplace’s 2014 inception, ConnectorCare has been the (only) option for applicants with income ranging from 138% FPL, the Medicaid eligibility threshold, to 300% FPL. The extension means that almost all subsidy-eligible marketplace enrollees will get a standardized ConnectorCare plan, at least through 2025.

All insurers who offer plans in Massachusetts’ regular ACA exchange (available through this year to enrollees with income over 300% FPL) will be required for the first time to offer ConnectorCare plans in 2024. Importantly, since ConnectorCare plans are in a single risk pool with the insurer’s offerings in the higher income marketplace, extending eligibility to 500% FPL should not cannibalize the Health Connector market plans offered to enrollees with income above that threshold. That is, the extension should not drive up premiums for those who get no subsidy or minimal subsidy.

The Massachusetts legislature included such an extension in its budget passed in August 2022, but Republican Governor Charlie Baker vetoed it. Last month, Democratic Governor Maura Healy, inaugurated this past January, signed the eligibility extension into law. 

Massachusetts poised to extend ConnectorCare's low out-of-pocket costs to 500% FPL

Mr. and Mrs. Mallard hunt for coverage

Predating and existing alongside the ACA marketplace, Massachusetts implemented and has maintained a better system.

At incomes up to the 300% of the Federal Poverty Level, Massachusetts applicants who earn too much to qualify for Medicaid are offered a standard, easily comprehensible benefit package with low premiums and out-of-pocket costs. That contrasts with the ACA's bewildering array of sometimes more than 100 plans in four metal levels, each offering a smorgasbord of copays and coinsurance, often with high but Swiss-cheese deductibles to which many services are not subject.

As measured by actuarial value -- the percentage of the average enrollee's annual costs* the plan is designed to pay -- ConnectorCare offers more generous coverage than the ACA's benchmark silver plans  (which are enhanced by Cost Sharing Reduction subsidies at incomes up to 250% FPL) at every income at which it's available. The AV difference is nominal at the 100-150% FPL income level, pronounced at 150-200% FPL, and enormous at 200-300% FPL, as illustrated below (via a 2021 program overview). Equally important, enrollees are not lured by bronze or gold plans with radically higher out-of-pocket exposure.

The ACA as it should have been: Massachusetts' ConnectorCare in a crisis

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On March 11, the Massachusetts Health Connector became the first ACA marketplace to respond to the flood of job losses triggered by the Covid-19 pandemic by opening an emergency Special Enrollment Period (SEP) in which any uninsured resident could enroll in private market coverage. Eventually, 12 of the 13 state-based exchanges opened emergency SEPs, whereas HealthCare.gov, the federal exchange serving 38 states, declined to do so, though HealthCare.gov has taken steps to ease the normal SEP-for-cause application process. 

On  May 1, Massachusetts reported that in the SEP's first 40 days, 8,300 state residents had gained coverage specifically through the emergency SEP, while 20,200 in total had enrolled in coverage in March and April -- the bulk of them via ordinary SEPs, in which an applicant reports a life change, usually loss of other insurance, that qualifies her to enroll outside of the annual fall Open Enrollment period.

It's hard to assess the success or impact of the emergency SEPs based on these kinds of data snippets, which several state marketplaces have put out. On the whole, March/April enrollment in Massachusetts represents 6.3% of enrollment as of the end of Open Enrollment in January. That does seem a somewhat elevated off-season pace.* In any case, it's likely that Medicaid will pick up the lion's share of the newly uninsured, and the enrollment report did not include Medicaid numbers.