Filed Under:Markets, Employee Benefits

PPACA Watchers: Multi-State Plans Still Coming

PPACA Toolbox (AP Photo/Jacquelyn Martin)
PPACA Toolbox (AP Photo/Jacquelyn Martin)

Officials at the U.S. Office of Personnel Management (OPM) could issue the regulations needed to set up a new type of health plan -- a multi-state plan (MSP) -- this spring.

Trish Riley and Jane Hyatt Thorpe, health policy researchers at Georgetown University, talk about the MSP program in a paper distributed by Georgetown University.

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the MSP program to increase the overall level of competition in the health insurance market.

PPACA opponents are trying to kill the law in Congress and in the courts.

If PPACA takes effect as written and works as drafters expect, individuals and small employers will be able to use a new system of tax credits to buy health coverage through a new system of health insurance exchanges, or Web-based health insurance supermarkets, starting in 2014. Each exchange is supposed to make at least one slot available to a nonprofit MSP and a second slot available to another MSP.

PPACA also is creating another new type of plan, the CO-OP plan, that is supposed to be a nonprofit, member-owned cooperative with no ties to existing health insurers.

The MSP program is a separate program, and it apparently could be open to the Blue Cross and Blue Shield plans, publicly traded health insurers, and other existing health insurers.

PPACA Section 1334 requires OPM to award the contracts needed to get the plans up and running by 2014.

The opportunity could be a large one: The Congressional Budget Office has estimated that 23 million non-elderly individuals could be obtaining coverage through the exchanges by 2017.

"MSPs must offer uniform essential health benefits in every state in which they operate and be available in all geographic regions and in all states that adopted a community-based rating system for setting premiums prior to the passage of [PPACA] (e.g., rating systems that take into account the health of the entire population and not certain subgroups)," Riley and Hyatt Thorpe write.

OPM will oversee the MSPs itself rather than getting the states involved, the researchers say.

"The MSPs will be phased in nationally and available in 60% of states in year one, 70% in year two, 85% of states by year 3 and all states in subsequent years," the researchers say.

OPM has many years of experience at administering the Federal Employees' Health Benefit Plan (FEHB) Plan, the researchers say.

The MSPs could help increase the level of competition in states where little competition in the health insurance market now exists, but some state insurance regulators contend that lack of state regulator control over the MSPs could lead to antiselection problems and other problems, the researchers say.

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