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Massachusetts’s Health Care Reform Law (Chapter 58 of the Acts of 2006)

An Act Providing Affordable, Quality, Accountable Health Care

In April of 2006, the Legislature passed a law that provided for comprehensive health care reform. At the time the law passed, approximately 500,000 Massachusetts residents were uninsured. Many of those residents will now have access to affordable health care services. Along with some other major reforms, one of the key parts of this law is the establishment of the Commonwealth Care Health Insurance Program, or C-CHIP.

Commonwealth Care

Factors for qualifying for Commonwealth Care:

  • Have lived in Massachusetts for at least 6 months

  • Are age 19 and over

  • Are not eligible for MassHealth, Medicare or the State Children’s Health Insurance (SCHIP)

  • Do not have health insurance, and have not been offered employer-sponsored health insurance in the previous 6 months. (Employer contribution to premium must be at least 20% for family plan, and 33% for individual plan, or can qualify for Commonwealth Care)

  • Earn less then the 300% of the Federal Poverty Level (FPL) Federal Poverty Level is set at $9,804 for an individual and $20,004 for a family of four.

For consumers earning less that 100% FPL, the program start date was October 1, 2006. There will be no premium for these consumers, but there will be small co-payments.

For those earning 101%-300% FPL, there is an anticipated start date of January 1st 2007. Monthly premiums will be determined on a sliding scale based on household income. There will also be a co-payment for services.

Commonwealth Care Premiums

Monthly Weekly Poverty Percentage
$18.00 $4.15 100-150%
$40.00 $9.23 150-200%
$70.00 $16.15 200-250%
$106.00 $24.90 250-300%

*Price Based per person

Enrollment Process

For people who have been using the Uncompensated Care Pool, twelve hundred letters are mailed per week to inform people that they may be eligible for the program. They then have to wait to receive another letter that will qualify them. Others may call 1-800-MA-ENROLL to get information about enrolling in Commonwealth Care. Once they mail the response letter back, they have 14 days to pick a plan and fill out the paperwork. If the recipient has not filled out the paperwork or picked a plan they are automatically enrolled into a plan. The recipient then has 60 days to change that plan if they are not satisfied. After 60 days they are not able to switch for a full year.

In addition to the Commonwealth Care Health Insurance, Chapter 58 calls for some important additional changes in the current Health Care system in Massachusetts, as outlined below.

From the ACT website:

  1. MassHealth Coverage:

    • Expands coverage for children up to 300% of poverty ($60,000/family of four).

    • Increases enrollment cap on MassHealth Essential (unemployed), CommonHealth (people with disabilities), and HIV programs.

    • Restores dental, dentures, eyeglasses benefits cut in 2002 for adults on MassHealth.

  2. Subsidized Health Insurance Coverage:

    • Establishes the Commonwealth Care Health Insurance Program which provides sliding-scale, subsidized coverage for low income uninsured individuals and families below 300% of poverty.

    • No deductibles.

    • No premiums if below 100% of poverty; sliding scale premiums if above 100% FPL ($20,000/family of 4).

  3. Commonwealth Health Insurance Connector:

    • Offers plans to small businesses (50 or fewer employees) and individuals.

    • Eligible workers and their families can buy coverage with pre-tax dollars.

    • The Connector will set subsidy levels for the Commonwealth Care program, set the affordability standards for individual mandate, and decide what insurance plans can be offered through the Connector.

    • Allows multiple employers to contribute to an employee’s premium.

  4. Provider Rate Increases:

    • State pays hospitals and physicians $90 million additional per year for 3 years.

    • Increases rates from ~80% of costs to ~95% of costs in 3 years.

    • Hospitals must meet quality benchmarks to get increased rates.

  5. Employer Responsibility:

    • Fair Share Contribution: Employers with 11+ employees who don’t offer coverage pay $295 per worker annually.

  6. Individual Mandate:

    • Beginning in July 2007, all residents must obtain health coverage if it is determined that people in their income bracket can afford insurance.

    • Enforced through the tax system:

      • In 2007 the penalty for non-compliance will be loss of the personal exemption

      • In 2008 and beyond, the penalty will be half the cost of the lowest available yearly premium.

  7. Insurance Market Reforms:

    • Insurers are encouraged to create plans with lower premiums that still provide comprehensive benefits. Current mandated health benefits, including mental health care, are protected.

    • Non-group (individual) health insurance market merges into the small group market, which could cut individual premiums by around 25%.

    • New, lower-premium products will be created for 19 to 26 year olds.

    • Requires health plans to offer family coverage to young adults for two years after they lose their dependent status or up to age 25, which ever comes first.

  8. Free Care Pool:

    • Uncompensated Care Pool continues with no changes in funding or regulations until October 1, 2007.

    • On October 1, 2007, the Uncompensated Care Pool becomes Health Safety Net Trust Fund administered by Office of Medicaid.

  9. Other Components:

    • Establishes Disparities Council and Quality and Cost Council.

    • Restores $20 million for public health prevention programs.

    • Allocates $3 million in outreach grants to community groups.

    • Convenes an Advisory Council to study Community Health Worker Outreach to reduce barriers to health care, particularly in ethnic and racial minority communities.

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