This article originally appeared at Healthcare Dive on January 27, 2015.
This provision of the ACA that allows insurers to offer plans across state lines was created to stimulate competition and increase plan choice on health insurance exchanges. However, in practice, the Multi-State Plan Program (MSPP) is not well structured to do so, experts say.
A recent report from the Mercatus Center at George Mason University argues that the measure could do the opposite of its intention and lead to further consolidation because it gives a competitive advantage to large insurers that already dominate health insurance markets. Independent health policy consultant Sarah Goodell agrees that any carrier that is in the position to apply to offer a multi-state plan is likely already selling plans on the individual market in nearly every state.
However, Goodell tells Healthcare Dive that while the Blue Cross Blue Shield Association (BCBSA) essentially owned the program in 2014, things are getting a little more interesting in 2015.
Here’s what’s new this year:
There is one new issuer apart from the Blue Cross Blue Shield Association. A group of Consumer Operated and Oriented Plans—non-profit insurance entities, governed by their members, that were included in the ACA as an alternative to creating a government-run insurance plan—has formed to offer multi-state plans in 11 states.
CO-OPs were intended to drive competition, although the jury is still out on their efficacy. At least three have either closed their doors or taken a step back, most recently Tennessee’s Community Health Alliance, which froze enrollmenton Jan. 15 (although CHA remains in operation).*
“I don’t know how much that will drive competition, but at least there is an additional issuer,” Goodell says. She notes that the group doesn’t include all of the CO-OPs operating in individual states.
The group is not listed under one name, but an online map indicates state-level information on plan availability, and when someone is on their state marketplace, the plans will be listed as MSP plans, Goodell says.
“It’ll be interesting to see where that goes,” Goodell says. “I’d say overall, enrollment in CO-OPs was kind of under what was projected, so I don’t know if this will help CO-OPs or help grow enrollment in the Multi-state Plan Program, but it’s something definitely to watch for this year.”
In another update for 2015, the BCBSA is expanding to five more states, in accordance with the MSPP’s phase-in requirements, Goodell says. It will now cover 36 states and DC, with the new states being Connecticut, North Carolina, Minnesota, Utah and Oregon.
Goodell adds that more developments could come in 2015 given that the Office of Personnel Management, which administers the MSPP (as well as the health insurance programs for federal employees and members of Congress), has requested comments on the program.
According to Goodell, OPM wants to know whether they should be giving more flexibility on the phase-in requirement; whether the MSPP should have to offer SHOP coverage; and whether the OPM should offer flexibility on the benchmark plan. Currently, issuers have to either use the state benchmark plan or one of the benchmark plans selected by OPM, and they couldn’t make a state-by-state decision. Now, issuers might get the flexibility to use either, easing the administrative burden caused by a one-size-fits-all solution.
The OPM also requested comments on whether they should have other types of structures that meet the definition of a multi-state plan, like the co-ops. “I’m not sure what they’re considering,” Gooddell said, “but maybe you could have regional plans team up to offer a multi-state plan.”
So while the MSPP has yet to live up to its intended purpose of spurring competition—because there are simply too few issuers positioned to be able to participate—that may be changing.
“My gut instinct is that these proposed changes are to make the program look more desirable to issuers by offering increased flexibility,” Goodell said.