Executive Order

Executive Order  No. 589: Merged Market Advisory Council

Date: 10/18/2019
Issuer: Governor Charlie Baker
Mass Register: No. 1403

Table of Contents

WHEREAS, the Commonwealth has a unique merged health insurance market structure, which blends individual and small group coverage segments with the intention of increasing and stabilizing its risk pool to provide greater access to affordable health insurance coverage;

WHEREAS, the Commonwealth has the lowest rate of uninsured residents in the nation;

WHEREAS, the number of covered lives in the small group market in the Commonwealth continues to decline;

WHEREAS, the cost of health care and health insurance coverage in the Commonwealth continues to grow and consume a significant portion of individuals’ and small employers’ budgets;

WHEREAS, the Commonwealth seeks to ensure that both individuals and small businesses have access to affordable health coverage;

WHEREAS, there is a need to understand how emerging federal policies may affect the Commonwealth’s merged market;

WHEREAS, the merged market was implemented in the Commonwealth over a decade ago and the dynamics of the health insurance landscape continue to evolve, the state has the potential to benefit from an in-depth review of its practices with the objective of achieving better outcomes for all stakeholders;

WHEREAS, the Administration recognizes that input from a diverse set of stakeholders is necessary to assist it in its mission of ensuring that all residents have access to affordable health insurance coverage;

NOW, THEREFORE, I, Charles D. Baker, Governor of the Commonwealth of Massachusetts, by virtue of the authority vested in me by the Constitution, Part 2, c. 2, § I, Art. I, do hereby order as follows:

Section 1. The Massachusetts Merged Market Advisory Council is hereby established to advise the Governor and Lieutenant Governor regarding the merged market for insured health coverage that is regulated under M.G.L. c. 176J and to propose recommendations to ensure the long-term stability of coverage for individuals and small employers in the merged market and the affordability of insured health benefit plan products offered therein.

Section 2.  The Council shall consist of up to 13 members. Up to 10 members shall be leaders, experts and other stakeholders drawn from outside of the Administration, and shall include persons with experience in and knowledge of the health insurance industry, including members representing the perspective of carriers, brokers, actuaries, and individual purchaser representatives, as well as persons representing the business community, including representatives of employers and small businesses. The Council shall also include the Commissioner of the Division of Insurance, who shall serve as chair, the Secretary of the Executive Office of Health and Human Services or her designee, and the Executive Director of the Commonwealth Health Insurance Connector Authority, all of whom shall serve as members of the Council ex officio. Each member shall be appointed by the Governor and serve at his pleasure, without compensation and in an advisory capacity.

Section 3. The Council’s principal purposes shall be to prepare a report that summarizes the status of the merged market based on an independent actuarial analysis and that makes recommendations for improved market functioning, including any policy and legislative changes that the Council recommends to ensure affordability and stability of coverage for small businesses and individuals.

The Council shall oversee an independent actuarial analysis of the merged market to inform its work and its final recommendations. In formulating the recommendations, the Council shall consider and address:

  1. The general stability of the merged market risk pool;
  2. Trends and dynamics related to the composition of the merged market risk pool and its impact on premiums and affordability for small businesses and individuals;
  3. Drivers of health care costs and premiums and growth of health care costs and premiums in the merged market;
  4. The impact to the merged market from: i) the presence or extent of any cross-subsidization between the non-group and small group market segments; ii) the role of federal risk adjustment; and iii) the impact of emerging coverage options for small-employers including, but not limited to, association health plans, multiple employer welfare arrangements, professional employer organizations, individual coverage health reimbursement arrangements and self-insurance;
  5. Policy or market dynamics that threaten the stability of the overall market for small group and individual coverage, or are forecasted to do so;
  6. Strategies to strengthen and promote affordability for the small group market, including but not limited to, whether federal waivers should be sought to permit flexibility in the application of merged market rules; and
  7. Other opportunities to improve the functioning of the merged market including, but not limited to, the establishment of a reinsurance program; provided, however, that the Council must consider the impact of such strategies on both the non-group and small group market segments and potential state and federal costs and funding sources.

Section 4. The Council shall be supported by staff from the Governor’s Office, the Division of Insurance, the Executive Office of Health and Human Services, and the Commonwealth Health Insurance Connector Authority. The Council also may utilize outside resources to conduct the independent actuarial analysis and other consulting services as necessary to support its recommendations.

Section 5. The Council may determine the procedures appropriate for conducting its proceedings. The Council is authorized to hold public meetings, fact-finding hearings, and other public forums to solicit feedback and request data from outside experts, policymakers, business organizations, carriers, consumers, advocates, and other interested persons. The Council shall consider information received from these sources in the development of its recommendations.

Section 6. The Council shall submit a final report with recommendations to the Governor not later than April 30, 2020.

Section 7. The Council shall terminate upon submission of the final report or six months after the signing of this order, whichever comes later.

Section 8. This Executive Order shall take effect upon execution and shall continue in effect until amended, superseded or revoked by subsequent Executive Order.

Given at the Executive Chamber in Boston this 18 day of October in the year of our Lord two thousand nineteen and of the Independence of the United States of America two hundred forty-three.

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