By: Brett Norman
June 24, 2013 05:07 AM EDT | Politico.com
|A program meant to beef up competition on Obamacare exchanges may not add much to the mix of insurance options after all.
The Multi-State Plan Program — which was the closest thing to a watered-down “public option” that made it into the final health law — is eventually supposed to provide at least two new insurance options in every state.
The problem is that the only insurers likely to be able to quickly scale up coverage across the country are already doing just that: selling their plans from coast to coast.
The Affordable Care Act calls for the federal government to contract with two multistate plans — and one has to be a nonprofit. They have to be available in at least 31 states next year, although they don’t necessarily have to be available in every community in a state at the outset. Within four years, they have to be available nationwide. Having failed to get a government-run public option, backers wanted at least one nationwide, nonprofit alternative to compete with the standard commercial plans.
So far, only Blue Cross Blue Shield has publicly declared that it will offer multistate plans. But the Blues already provide coverage in all 50 states, and the early indications are that their multistate plans will basically be clones of the standard plans they’ll be selling anyway in any given state. That means consumers won’t really be getting anything new.
“For all practical purposes, the [multistate] plan in Kansas is the same as the one they submitted to be their regular plan for the regular marketplace,” said Linda Sheppard, health policy director in the Kansas Department of Insurance. “I think for our state, it doesn’t really offer another option.”
Kansas has two Blue Cross insurers. One is in the Kansas City area, and the other covers the other 103 counties. And it’s that second one offering the multistate plan — in the same same 103 counties, Sheppard said.
The Office of Personnel Management, which administers federal employee health insurance across the country, must sign off on multistate plans before they can be offered on the new insurance marketplaces known as exchanges. It has yet to officially do so.
OPM declined to comment, other than to say that it was still reviewing more than 200 plan applications — they were due in late March — and will release more information after it contracts with insurers. But there are clear signs that one of the slots is for the Blues.
At least five states have publicly said that multistate plans will be offered on their exchanges next year — Arkansas, Kansas, Maryland, Michigan and Montana. All except Maryland have identified Blue Cross affiliates as the sponsors.
And some insurance regulators believe that the Department of Health and Human Services wrote the multistate plan regulations so that the Blue Cross Blue Shield Association, a nonprofit umbrella group of Blue Cross affiliates, could be counted as the nonprofit contractor, even though some of its members are for-profit companies.
Alissa Fox, senior vice president for the Blue Cross and Blue Shield Association, said although some states have made Blue Cross multistate offerings public, “it’s not a done deal yet.” She also said she didn’t know what other companies were being considered for the program.
“It’s a very competitive process so people have been keeping this information to themselves,” she said.
Many policy experts and insurance regulators have been skeptical of the program from the outset. The National Association of Insurance Commissioners had raised concerns that the plans would escape state regulation, possibly gaining an advantage over in-state plans. But that was addressed in the regulations.
The remaining question is whether any real competition is possible. Only a small group of insurers are capable of offering new plans in 31 states next year, said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute and a consumer representative at NAIC. They’re the ones that have the presence and the provider networks already.
“The barriers that keep issuers from entering new markets have not changed,” Corlette said. “Probably the issuers that could qualify as a multistate plan in all 31 states in year one are probably already there in those states.”
The multistate plans will have that federal stamp of approval from OPM, which could set them apart, at least from a marketing perspective.
“That could appeal to a segment of consumers,” Corlette said. “But it’s hard to see how anyone could come in and offer something that is genuinely different.”
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