1
Massachusetts Health Connector
Massachusetts Cost Sharing Subsidies in
ConnectorCare: Design, Administration,
and Impact
August 2021
2
Table of Contents
About the Health Connector ........................................................................................................................ 3
Executive Summary ..................................................................................................................................... 3
ConnectorCare Overview ............................................................................................................................. 4
Program Design ........................................................................................................................................ 4
Membership ............................................................................................................................................. 5
ConnectorCare Cost Sharing Subsidy ......................................................................................................... 6
Financial Structure and Cost ................................................................................................................... 6
Administration and Cost .......................................................................................................................... 8
Impact ........................................................................................................................................................... 8
Conclusion ................................................................................................................................................. 10
Appendices ................................................................................................................................................ 12
Appendix A. ConnectorCare Fiscal Year 2020 Budget ....................................................................... 12
Appendix B. 2021 ConnectorCare Plan Designs ................................................................................ 13
Endnotes ................................................................................................................................................ 14
3
About the Health Connector
Since its inception in 2006, the Health Connector has worked to expand access to high-quality
health care in its role as an online Marketplace for Massachusetts residents and small businesses to
find, compare, and enroll in affordable health coverage. Fifteen years later, the Health Connector
continues to implement programs and advance policies that improve health insurance across the
Commonwealth. Currently, the Health Connector serves nearly 275,000 non-group health members,
representing 83 percent of the individual insurance market in Massachusetts.
Executive Summary
Through affordable premiums and cost sharing, the Health Connector’s ConnectorCare program
promotes access to care and reduced cost burdens for approximately 193,000 low-to-moderate
income Massachusetts residents. As the state Marketplace’s flagship health insurance subsidy
program, ConnectorCare offers the Commonwealth’s families comprehensive and high-quality health
plan options with affordable premiums and point of care cost sharing.
State and federal subsidies work in concert to decrease the cost of a carrier’s unsubsidized Silver
plan premium and cost-sharing down to ConnectorCare levels. Federal Advance Premium Tax Credits
(APTCs) and Massachusetts state premium subsidies are applied to unsubsidized Silver premiums,
resulting in ConnectorCare premiums as low as $0 per member per month. Similarly, Massachusetts
state Cost-Sharing Reductions (CSRs) are applied to Silver plan designs (with the state paying the
difference between federal Actuarial Value variants and ConnectorCare plans) resulting in
ConnectorCare plans without deductibles and with co-pays as low as $0 for Primary Care Physician
(PCP), specialist, emergency, urgent care, inpatient hospitalization, and imaging services.
The additional financial value and protection to members enrolled in the ConnectorCare program
(compared to enrollees receiving only Affordable Care Act subsidies or no subsidies) is a result of
additional state dollars invested to reduce monthly premium and point-of-service costs that, in turn,
translate to near-universal coverage and market stability. Massachusetts has the highest rate of
coverage out of any state in the country (97% as of 2019) as well as the second lowest average
monthly premiums.
i
ii
The impact of the state’s investment can also be seen in ConnectorCare
enrollees’ satisfaction with their coverage, perceptions of affordability, and lower rates of delayed or
forgone care and unpaid medical debt when compared to non-ConnectorCare members and the
state overall:
• ConnectorCare members are more likely to find their cost sharing to be affordable compared
to non-ConnectorCare members (57% agreed that the amount they paid for health care
services was reasonable compared to 18 percent of non-ConnectorCare members).
• ConnectorCare members report lower out-of-pocket spending compared to non-
ConnectorCare members and overall Massachusetts residents (56 percent spent under
$500 in the last 12 months compared to 30 percent of non-ConnectorCare members).
• ConnectorCare members are less likely to report delayed or forgone health care due to cost
compared to non-ConnectorCare members and overall Massachusetts residents (19 percent
reported delaying or not getting health care services in the last six months because of its
cost compared to 32 percent, on average, of non-ConnectorCare members).
This technical brief seeks to provide background on the ConnectorCare program and detail the
financial structure, administration, cost, and individual and family-level impact of the Massachusetts
state-level cost sharing subsidy.
4
ConnectorCare Overview
Program Design
ConnectorCare plans are Qualified Health Plans (QHPs) that incorporate federal Advance Premium
Tax Credits (APTCs) and cost-sharing reductions (CSRs) and state subsidies to lower the cost of
coverage and point-of-service care for eligible individuals and families. State residents can be eligible
for ConnectorCare if they meet criteria required by the Affordable Care Act (ACA) to receive
Marketplace coverage and subsidies, but only if their incomes do not exceed 300 percent of the
Federal Poverty Level (FPL).
The ConnectorCare program is constructed based on Commonwealth Care, Massachusetts’s pre-ACA
subsidy program for eligible state residents with low to moderate incomes. Commonwealth Care was
established and partially funded through a Medicaid Section 1115 Demonstration Waiver, which
provided the state with flexibility for efficient program design and expanded eligibility options beyond
traditional offerings. The program served lower-income individuals who did not qualify for Medicaid
(MassHealth) or other types of coverage, such as employer-sponsored coverage. The benefit design
sought to bridge the gap between MassHealth and employer-based coverage, gradually increasing
out-of-pocket requirements with income.
In 2014, the ACA introduced APTCs and CSRs, which were modeled off the Commonwealth Care
subsidies. To maintain the same level of affordability as Commonwealth Care, Massachusetts
amended its existing 1115 Waiver to create ConnectorCare, “wrapping” federal subsidies with
additional state subsidies to meet a state affordability schedule that exceeds the federal standard.
State funding for ConnectorCare CSRs and premium subsidies is held in a dedicated trust, the
Commonwealth Care Trust Fund (CCTF), which collects revenue from cigarette taxes, state individual
mandate penalties, and employer assessments. In contrast to federal APTCs, state premium wrap
allocated through the CCTF is not reconciled by the Health Connector or members at the end of the
plan year.
1
The Health Connector sets standards for ConnectorCare plans and communicates cost sharing
designs to carriers via its annual plan certification process, known as the “Seal of Approval”. While
not required to administer state CSR subsidies, this policy measure helps facilitate the program.
Today, the program includes five Plan Types that vary based on an individual’s income (see Figure 1).
Each Plan Type comes with a certain minimum premium contribution per enrollee and a certain
actuarial value – a measure of plan generosity. Monthly minimum premiums vary on a sliding scale
ranging from $0-$133. Individuals who do not enroll with the lowest cost carrier available to them
may pay more than the minimum premium. In addition to small premiums, ConnectorCare plans
have low co-pays for covered services and no coinsurance or deductibles. The actuarial values range
from 92 percent to 99.6 percent. All plans cover the same benefits regardless of premium and plan
type. In 2021, five carriers participate in the ConnectorCare program overall, but ConnectorCare
1
Notably, under its 1115 authority, Massachusetts’s investment in ConnectorCare state wrap subsidies for enrollees is also largely eligible
for Medicaid federal financial participation (FFP). FFP matches a portion of the state’s spending on premium and cost sharing subsidies
only for citizens and certain lawfully present immigrants. Because immigrants who do not qualify for FFP are legally entitled to obtain
coverage through the Health Connector, the state covers a larger portion of subsidies for these residents. The ConnectorCare Budget for
Fiscal Year 2020 (FY20) is available in Appendix A.
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enrollees can only select plans from up to four different carriers, depending on availability in their
region.
Table 1. ConnectorCare Plan Type by FPL, Annual Income, and Lowest Cost Plan Premium
Membership
As of Spring 2021, the Health Connector serves approximately 275,000 Massachusetts residents (or
83 percent of the overall non-group market), primarily through the ConnectorCare program (62
percent of all non-group market enrollees).
iii
2
Fifty-eight percent of ConnectorCare enrollees fall in
Plan Types 2B and 3A based on their annual income (150-250 percent FPL). Over half of
ConnectorCare members enroll with Tufts Health Direct while 35 percent enroll with Boston Medical
Center HealthNet Plan.
Figure 1. ConnectorCare Members by Plan Type (April 2021)
Source: Health Connector Analysis of Membership Data
2
Health Connector membership counts as of May 2021 are understated because individuals experiencing loss of employment income due
to the pandemic are likely qualifying for MassHealth now instead of Health Connector coverage. Medicaid benefit protections authorized
under the Families First Coronavirus Response Act decreased coverage transitions between the Health Connector and MassHealth.
8%
17%
31%
27%
18%
0%
5%
10%
15%
20%
25%
30%
35%
Plan Type 1 Plan Type 2A Plan Type 2B Plan Type 3A Plan Type 3B
ConnectorCare
Plan Type
FPL Range 2021 Annual Household
Income (Individual)
Lowest Cost Plan
Premium
Plan Type 1 0-100% FPL Less than $12,760 $0 per person
Plan Type 2A 100.1-150% FPL $12,761 to $19,140 $0 per person
Plan Type 2B 150.1-200% FPL $19,141 to $25,520 $46 per person
Plan Type 3A 200.1-250% FPL $25,521 to $31,900 $89 per person
Plan Type 3B 250.1-300% FPL $31,901 to $38,280 $133 per person
6
Figure 2. ConnectorCare Members by Carrier (April 2021)
Source: Health Connector Analysis of Membership Data
ConnectorCare enrollees are diverse and tend to draw from populations that historically face
relatively higher structural barriers to enrolling in health coverage and accessing care when
compared to other segments of the non-group market and the state population more broadly.
ConnectorCare members are more likely to be women, speak a language other than English, and
have a lawfully present immigration status compared to non-ConnectorCare members.
Table 2. On-Exchange ConnectorCare vs. Non-ConnectorCare Member Demographics
ConnectorCare Cost Sharing Subsidy
Financial Structure and Cost
The ConnectorCare program is based on a carrier’s lowest-cost unsubsidized Silver tier plan (or
“base plan”). These base plans are enriched by federal and state subsidies according to program
standards. Specifically, state CSRs are used to lower the cost of a ConnectorCare carrier’s base plan
point of care cost-sharing to ConnectorCare cost-sharing levels.
3
The ConnectorCare program has very few members under the age of 18 because children at ConnectorCare income levels likely qualify
for the state’s Children’s Health Insurance Program (CHIP).
53%
35%
5%
4%
3%
0%
10%
20%
30%
40%
50%
60%
Tufts Direct BMC HealthNet Health New England AllWays Health
Partners
Fallon Health
ConnectorCare Non-ConnectorCare
Subsidy APTCs + State Wrap APTCs only No Subsidies
Age (average) 43 years old
3
44 years old 39 years old
Gender 56% women 52% women 50% women
Household
size
79% Individual members
21% families
56% Individual members
44% families
76% Individual members
24% families
Immigration
status
31% Lawfully present
immigrants
12% Lawfully present
immigrants
9% Lawfully present
immigrants
Language 19% speak a language
other than English
11% Spanish
6% speak a language
other than English
3% Spanish
3% speak a language
other than English
2% Spanish
7
From 2014 to 2017, a combination of federal CSRs and state CSRs helped reduce ConnectorCare
enrollee cost-sharing. During Plan Year 2017, the federal CSR payments were withdrawn by the
federal administration and were no longer a component of ConnectorCare cost-sharing. To account
for these lost federal funds, carriers participating in ConnectorCare were permitted to “load” their
Silver plan premiums, netting higher APTC amounts.
Now, ConnectorCare carriers receive advance CSR payments from the Health Connector only, but
they continue to provide ConnectorCare enrollees services at the reduced ConnectorCare co-pay
level, rather than co-pays of the underlying the base plan.
In 2021, for an unsubsidized Silver member, the base plan covers, on average, 70 percent of the
cost of services, while the enrollee is responsible for 30 percent (or 70 percent Actuarial Value).
Figure 3 highlights how federal CSRs used to and how state CSRs currently supplement the base
plan.
In Calendar Year 2019, the latest year for which data is available, the Health Connector spent
$108,872,435 on state CSR wrap (or $43.19 per member per month on average). If federal CSRs
had not been withdrawn, Health Connector members would have received approximately $103
million (or an average of $41 per member per month) in federal CSRs. In comparison, the Health
Connector spent $169,465,271 on state premium wrap (or $67.23 per member per month on
average) and members received $630,120 894 in federal APTCs (or $249.99 per member per
month on average). These figures represent gross amounts.
Figure 3. 2021 Massachusetts Cost-Sharing Make-Up (Actuarial Value)
Numbers in parentheses denote HIOS ID variants which identify an enrollee’s eligbility for plans at reduced cost-sharing
levels.
4
4
The Health Connector’s eligibility and enrollment systems use the six federal variants to identify an enrollee’s plan according to their
eligibility for federal subsidies. All ConnectorCare members are enrolled in the HIOS ID of the carrier’s underlying Silver plan, with a
ConnectorCare variant at the end. ConnectorCare members are enrolled in variants -02, -04, -05, or -06 according to their FPL and AI/AN
status.
8
Today, state CSRs from the Health Connector lower the cost of the co-pays for benefits such as PCP
visits and inpatient hospitalization. Table 4 shows how state CSRs bring Silver plan cost sharing
down from the unsubsidized design (left) to the reduced ConnectorCare designs (right).
Table 3. Key services and cost-sharing for Standard Silver and ConnectorCare plans
Note: Please see
Appendix B
for complete list of services and cost-sharing for Standard Silver and
ConnectorCare plans. A check mark (
) denotes this benefit is subject to the annual deductible.
Administration and Cost
The operational process for distributing state CSRs relies on the same general process followed for
federal CSR, prior to the cessation of federal CSR payments. The Health Connector’s actuary
calculates premium multipliers for various actuarial values under Plan Types. These calculations are
based on the methodology used to calculate federal CSR plan variation multipliers and incorporate
the cost of potential additional care members may be encouraged to pursue by the lower level of
cost sharing. Advanced payments per member are determined by applying these multipliers to base
plan premiums. The advanced payments fund carrier costs for providing cost sharing to
ConnectorCare levels. The payments are submitted to carriers every month along with state premium
subsidies and enrollee contributions. Advance payments vary each month based on actual
enrollment.
Approximately five months after the end of the plan year, the Health Connector receives claims files
from ConnectorCare carriers that include the true CSR cost based on actual utilization of medical
services by enrollees. The Health Connector actuary compares actual costs to the sum of advanced
payments carriers received in each month of the plan year. The Health Connector reconciles advance
CSR payments by either making an additional payment to the carrier if the sum of advanced
payments is lower than the actual CSR cost, or receive returned funds from the carrier if the sum of
advanced payments is higher than the actual CSR cost.
Impact
The Health Connector’s state CSR wrap was designed to reduce the burden of health care costs on
low-to-middle income individuals and families living in the Commonwealth. By targeting point of care
cost sharing relief to ConnectorCare enrollees, the Health Connector has made care more affordable
for sub-populations at greatest risk for uninsurance. Approximately 75 percent of the uninsured in
Massachusetts earn under 300 percent FPL and so likely qualify for Marketplace or Medicaid
coverage.
iv
The benefits of state CSRs on ConnectorCare members are magnified when comparing
Sample Plan
Feature/Service*
2021 Standard
Silver Plan
ConnectorCare
Plan Type 3
ConnectorCare
Plan Type 2
ConnectorCare
Plan Type 1
PCP Office Visits $30 $15 $10 $0
Specialist Office
Visits
$55 $22 $18 $0
Emergency Room $300 $100 $50 $0
Urgent Care $55 $22 $18 $0
Inpatient
Hospitalization
$1,000 $250 $50 $0
X-rays and
Diagnostic
Imaging
$50 $0 $0 $0
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their health care access and cost outcomes to those of non-ConnectorCare members and
Massachusetts residents overall.
The evidence below synthesizes results from the Health Connector’s 2020 annual non-group
member experience survey and the Center for Health Information and Analysis’s 2019
Massachusetts Health Insurance survey:
Satisfaction: ConnectorCare members consistently report higher levels of satisfaction with the Health
Connector than APTC-only and unsubsidized members. ConnectorCare members are more likely to
find their premiums and cost sharing to be affordable compared to non-ConnectorCare members.
Figure 4. Perceptions of Premium and Cost Sharing Affordability by Health Connector Subsidy Level
* Statistically significant difference from Overall
Out-of-pocket spending: ConnectorCare members report lower out-of-pocket spending compared to
non-ConnectorCare members and overall Massachusetts residents, with 56 percent spending under
$500 in the last 12 months (only 30 percent of non-ConnectorCare members spent less than $500).
Delayed or forgone care: ConnectorCare members are less likely to report delayed or forgone health
care due to cost compared to non-ConnectorCare members and overall Massachusetts residents.
Approximately 19 percent of ConnectorCare members reported delaying or not getting health care
services (excluding dental and vision) in the last six months because of its cost, compared to 31
percent of members receiving APTCs only and 33 percent of unsubsidized members. Unsubsidized
members were significantly more likely to report delaying care compared to overall Health Connector
members (23 percent).
Among all state residents, 27 percent reported having some unmet need for health care in the last
12 months due to the cost of care. Over half of Massachusetts residents who had an unmet need for
care due to cost while they had health insurance went without care because the care was not
covered by their insurance plan (52 percent). Additionally, more than one-third went without care
because the copay or coinsurance was too high (34 percent) and nearly one in four reported that
they went without care because it would have been subject to the deductible (24 percent).
18.4%*
21.6%*
18.5%*
21.2%*
57.3%*
62.9%*
47.4%
52.4%
I think that the amount that I pay for my health
care services is affordable (% Agree)
I think that the amount I pay for my premium is
reasonable (% Agree)
Overall
ConnectorCare
APTC only
Unsubsidized
10
Figure 5. Delayed or Forgone Care Due to Cost by Health Connector Subsidy Level
Unpaid medical debt: Though ConnectorCare members were slightly more likely to indicate having
medical debt compared to non-ConnectorCare members and all Massachusetts residents,
ConnectorCare members were also more likely to have smaller debts (less than $2,000).
Approximately 64 percent of ConnectorCare members with medical debt owed less than $2,000,
compared to 36.5 percent of APTC-only members, 38.8 percent of unsubsidized members, and 47.6
percent of all Massachusetts residents.
Non-ConnectorCare members and overall Massachusetts residents were most likely to indicate that
medical bills being paid off over time were due to care that had to be paid for as part of the
deductible under their health plan. Approximately 42 percent of APTC-only and unsubsidized
members and 69 percent of Massachusetts residents overall indicated that medical debts were
related to care paid for as a part of their deductible.
Figure 6. Reason for Medical Debt by Health Connector Subsidy Level
Conclusion
The Health Connector’s investment in a cost sharing subsidy program has not only lowered out-of-
pocket spending for ConnectorCare members but has protected them against medical debt and
delayed or forgone care. Affordable cost sharing ensures that members view their plans as high-
32.6%*
30.8%
19.2%
22.7%
27.0%
Massachusetts Overall
Health Connector Overall
ConnectorCare
APTC Only
Unsubsidized
41.6%
17.7%
30.3%
42.1%
23.1%
22.8%
15.3%
26.1%
39.1%
23.6%
23.9%
35.8%
69.0%
62.6%
51.1%
Care that had to be paid for as part of the
deductible under your health plan
Co-payments or co-insurance for care
under your health plan
Care that was not covered by your health
plan
Overall Massachusetts
Overall Health Connector
ConnectorCare
APTC Only
Unsubsidized
11
value and are able to access the care they need when they need it. Due in large part to
ConnectorCare, the Commonwealth has the highest coverage rate in the nation coupled with one of
the lowest average Marketplace premiums per member per month. In the future, the Health
Connector plans to continue member-focused and thoughtful program design of its state wrap
program to continue to maximize the benefits of Marketplace plans for all state residents to ensure
meaningful access to health care services.
12
Appendices
Appendix A. ConnectorCare Fiscal Year 2020 Budget
The ConnectorCare budget below shows expected and actual spending for FY20. The FY20
ConnectorCare program budget was updated in February 2020.
FY20 Net Costs FY20 as of July 2020
ConnectorCare Enrollees
v
$178,883,000
State Premium Wrap $94,211,000
State CSR $82,028,000
Cost Sharing Reconciliation (CY18) $2,645,000
State Mandated Benefits
vi
$485,000
2018 Medical Loss Ratio Rebate
vii
-$2,033,000
Wellness program subsidies $213,000
CCTF Draw $45,000,000
Total Program Cost (Net of FFP) $222,549,000
CONNECTORCARE
BENEFITS
&
COPAYS
Plan
Type
Medical
Maximum
Out-of-Pocket
(Individual/
Family)
Prescription
Drug
Maximum
Out-of-Pocket
(Individual/
Family)
Preventive
Care/Screening/lmmunization
Primary
Care
visit
to
treat
injury
or
illness
(exc.
Well
Baby.
Preventive
and
X-rays)
Specialist
Office
Visit
Mental/Behavioral
Health
and
Substance
Abuse
Disorder
Outpatient
Services
Rehabilitative
Speech
Therapy
Rehabilitative
Occupational
and
Rehabilitative
Physical
Therapy
Emergency
Room
Services
Outpatient
Surgery
All
Inpatient
Hospital
Services
(including
Mental/Behavioral
Health
and
Substance
Abuse
Disorder
Services)
High
Cost
Imaging
(CT/PET
Scans.
MRIs.
etc.)
Laboratory
Outpatient
and
Professional
Services
X-Rays
and
Diagnostic
Imaging
Skilled
Nursin
g
Facility
Retail
Prescription
Drugs:
Generics
Preferred
Brand
Drugs
Non-Preferred
Brand
Drugs
Specialty
High
Cost
Drugs
Plan
Type
1
$0
$250/
$
500
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1
$
3.65
$
3.65
$
3.65
Plan
Types
2A&2B
$
750/
$
1.500
$500/
$
1.000
$0
$
10
$18
$10
$10
$10
$50
$50
$50
$30
$0
$0
$0
$10
$20
$40
$40
Plan
Types
3A
&
3B
$1.500/
$
3.000
$750/
$
1.500
$0
$15
$22
$15
$20
$20
$100
$125
$250
$60
$0
$0
$0
$12.50
$25
$50
$50
13
Appendix B. 2021 ConnectorCare Plan Designs
14
Endnotes
i
Center for Health Information and Analysis. Massachusetts Health Insurance Survey, April 2020 (data from
2019). https://www.chiamass.gov/massachusetts-health-insurance-survey/ .
ii
Centers for Medicare and Medicaid Services. Plan Year 2021 Public Use File, April 2021.
https://www.cms.gov/research-statistics-data-systems/marketplace-products/2021-marketplace-open-
enrollment-period-public-use-files
iii
Center for Health Information and Analysis. Enrollment Trends, March 2021 (data through September 2020).
http://www.chiamass.gov/enrollment-in-health-insurance/.
iv
Center for Health Information and Analysis. (2020).
v
Includes enrollees who receive FFP as well as those who do not.
vi
The ACA requires states to defray the cost of benefits required by state law in excess of essential health
benefits for individuals enrolled in any plan offered through a Marketplace. 42 U.S.C. §18031D.
vii
The Medical Loss Ratio (MLR) Rebate represents the state share of MLR rebates paid out through carriers.
