Insurer for nearly 50,000 poor, elderly, disabled people in Mass. running out of money

Boston Globe

04-03-2025

But after years of multimillion dollar operating losses, Commonwealth Care's cash reserves have fallen dramatically, triggering MassHealth, the state's Medicaid program, in November to block the insurer from acquiring new members. Disability advocates recently said in a letter to state regulators that they understood the company was looking to be acquired, but that those efforts have so far not been successful.
Executives from Commonwealth Care declined to comment.
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The organization's financial struggles come after a period of rapid growth, in which it took on tens of thousands of new patients in three other states, former board members said. Some have suggested state and federal payments to the company to cover the care of their clients have not kept pace with a population in need of especially expensive services.
'What appears to be the demise of the organization is actually frightening, when I think of the consequences for the people it enrolls,' said Bill Henning, executive director of the Boston Center for Independent Living, which provides advocacy and services for people with disabilities. 'The immediate concern we all need to have … is how do you continue to care for folks?'
The extent of the cash crisis was detailed in letters MassHealth sent to Commonwealth Care in October, warning of an impending enrollment freeze starting the following month, and laying out a litany of concerns.
Among them, Commonwealth Care had borrowed $120 million from a line of credit, due to be paid off in December 2024. But by October, the organization had not secured additional cash, potentially forcing the organization to 'liquidate a significant amount of assets' to pay off the debt.
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The insurer had also informed state regulators that it projected having 'less than zero cash on hand' by the first quarter of 2025. Additionally, the organization was required to have over $100 million for two of its MassHealth programs. By August, the organization had only $66.9 million in reserves. MassHealth worried the organization wouldn't be able to pay vendors and providers.
'CCA, as an organization, is in financial distress,' said the letter, sent to CEO Chris Palmeri.
In a recent statement , a spokesperson for the state's Medicaid program MassHealth said the state was closely monitoring the organization's finances, and said the temporary enrollment freeze was to 'protect members' while the insurer addressed its solvency issues.
The turmoil has alarmed disability advocates. In a letter to state officials, advocates called for the state to appoint a receiver to oversee the organization.
'We have heard that no acquisition of CCA is imminent, that its financial position may be unsound, and that its members are at increasing risk,' said the letter, sent by Health Law Advocates, a public interest law firm, on behalf of the disability advocacy group the Disability Policy Consortium.
The care of the insurer's members is complex, with networks of clinicians coordinated by the insurer and built up over time in a way that might not be transferable to other insurance plans. In some parts of the state, few similar options exist. It is unclear if other insurers would even have the capacity to take on so many additional members.
Should patients move to other insurers, they may face denials or lack of coverage for crucial services.
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Harry Weissman, left, executive director of the Disability Policy Consortium, and Matt Selig, executive director of Health Law Advocates, in their office. The Disability Policy Consortium has called for the state to appoint a receiver to oversee the financially unstable insurer Commonwealth Care Alliance.
Pat Greenhouse/Globe Staff
Governor Maura Healey's office said it was reviewing the advocates' letter and monitoring the situation. Attorney General Andrea Campbell's office said it was assessing how best to help members if they lose coverage.
'Our office understands the potentially serious effects that any disruption of care coordination could have on the communities served by CCA,' said a Campbell spokesperson.
For most of its members in Massachusetts, Commonwealth Care acts as an insurer, offering two products: one for disabled individuals under 65 called One Care and a product for low-income seniors called Senior Care Options. Under both plans, Medicaid and Medicare provide Commonwealth Care a set amount of monthly money per member, allowing the organization greater flexibility in funding care.
The 'magic of the model,' Henning said, is that it brings together disparate physical and behavioral health services with community-based aid such as personal care attendant services, meals, and transportation, allowing people with disabilities and seniors to live independently.
Dennis Heaphy, a patient from Boston who uses a wheelchair, said a nurse practitioner at Commonwealth Care coordinates his care, which includes physical therapy, occupational therapy, allergy specialists, pulmonology specialists, and dental care. Before CCA, Heaphy primarily used the emergency room for medical needs.
'I owe my life to CCA, to the model of care they have provided me,' said Heaphy, who is also a policy analyst with the Disability Policy Consortium. 'That for me is why it's important for this to be preserved. I know how well it works when it works.'
Dennis Heaphy said he owes his life to the insurer Commonwealth Care Alliance, which serves Massachusetts' disabled, elderly, and low-income residents and is struggling financially.
Jessica Rinaldi/Globe Staff
While other insurers in Massachusetts may have similar offerings, Commonwealth Care has a reputation for often being more generous and is among the largest, serving roughly 20 percent of those in Senior Care Options and about 70 percent of the state's enrollees in One Care.
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A pioneer, Commonwealth Care has also gone further than other insurers, operating health clinics that serve over 1,000 patients annually.
One of the nonprofit's founders, Bob Master, said he realized first as a doctor in the 1970s and later as the state's Medicaid director that disabled elders weren't adequately served by the typical brief office visit. Keeping those patients out of the emergency department would take a different payment model, one that would provide a set amount of money per patient, adjusted for their illnesses' severity. With funding like that, you could do home visits, or simply buy someone an air conditioner to prevent heat stroke.
The model's success was clear in its growth. What was a Medicaid grant in the '90s to care for a few hundred elderly ultimately blossomed into an example used by the federal government as the basis for expanding similar programs in other states under the Affordable Care Act. By 2015, Commonwealth Care had some 18,000 members.
That same year, Master retired and the board chose Palmeri, a health plan executive from New York, as its new leader.
Palmeri had dreams of expanding the model nationally, but some board members were skeptical, said Charlie Carr, a former board member who works as a legislative liaison for the Disability Policy Consortium.
'The concerns against expansion were that we were entering into unknown territory,' said Carr. 'We didn't know how CCA's model would be accepted in other states.'
Commonwealth Care's expansion progressed anyway, propelled by the acquisition of companies in Michigan and California and the launch of insurance products in Rhode Island. By 2022, the organization said it was overseeing care for 100,000 people across four states.
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Paramedic Matthew Michaud, left, of EasCare Ambulance Service, draws a blood sample from Jamal Lee during a home visit in Quincy in 2018. The visit was part of a pilot program, in partnership with Commonwealth Care Alliance, to provide care in patients' homes.
Craig F. Walker
Around that time, Commonwealth Care also made a
As Commonwealth Care grew, however, advocates and members said it increasingly denied health care services. The organization began to experience high staff turnover, they said.
Because of the changes, Heaphy said, providers have told him the level of services that once allowed him to recover from surgery in his home likely wouldn't be available to members today.
'They have abandoned that original care model that was developed in concert with the disability community,' said Harry Weissman, executive director for the Disability Policy Consortium.
Signs of troubles also emerged. The company's massive expansion was accompanied by operating losses, including $14.3 million in 2022, and $105.8 million in 2023, according to MassHealth records.
In October, Commonwealth Care announced it would cease all Medicare Advantage plans in California, Michigan, and Rhode Island, and one such plan in Massachusetts by the end of the year. It is unclear how many people Commonwealth Care still serves outside of Massachusetts.
That same month, MassHealth sent the letters to Commonwealth Care, barring new enrollees starting in November.
'My biggest question now is how could the board see this gradual decline in their financials, and not take action?' said Carr, who left the board but has stayed in touch with leadership.
Board chair David Klein did not respond to requests for comment.
A view of the CCA Primary Care clinic in Boston.
David L. Ryan/Globe Staff
Joe Paduda, a former board member, said the expansion was aimed at diversifying the revenue Commonwealth Care relied upon from Massachusetts, but the organization made mistakes such as not doing enough market research on approaching potential customers.
The larger factor, he said, is that Medicaid reimbursements haven't kept pace with CCA's costs to provide robust services.
'We did the right thing at the wrong time,' he said. 'The state of Massachusetts said 'We're not giving you money,' the feds said the same thing, and we failed at execution in some expansion states. It was a perfect storm.'
Paduda ultimately resigned from the board in December over disagreements with the board's chair, as well as the CEO, though he declined to detail specifics.
MassHealth contested that its rates were insufficient, saying it increased the payment per member from 2022 to 2024 for both Commonwealth Care programs. While Medicare reimbursement might sometimes be insufficient, MassHealth overcompensates, the agency said.
Jessica Bartlett can be reached at