The federal government is preparing to unveil two multistate health insurance plans, which would serve as a substitute for a government-run public health plan that was nixed during health reform negotiations, the New York Times reports.
About the Multistate Plans
The plans -- of which at least one must be operated under contract with the government by a not-for-profit entity, as mandated by the Affordable Care Act -- will be offered to consumers in all states.
Supporters for the plans say they will increase competition with private insurers in the state insurance markets and provide individuals and small employers with additional options for affordable insurance. According to the Times, the U.S. Office of Personnel Management will negotiate the premiums and benefits for the multistate insurance plans.
John O'Brien, director of health care and insurance at OPM, said the plans would be available to consumers through the insurance exchanges created by ACA. The Obama administration has projected that as many as 750,000 individuals could be enrolled in a multistate plan in the first year.
Possible Operator of Multistate Plan
Insurance industry experts say that the Government Employees Health Association is a likely candidate to operate one of the plans. GEHA's recent acquisition of an insurance company that has licenses in all 50 states -- a requirement for an operator of a multistate plan -- boosts its standing, the Times reports.
GEHA -- a not-for-profit organization -- already covers more than 900,000 federal employees, retirees and dependents, making it the second largest plan for federal workers after the Blue Cross and Blue Shield program, according to the Times.
State Insurance Regulators Raise Concern About State Laws
Although the Obama administration has promised to "work cooperatively with states," there is some uncertainty about whether the multistate plans would have to comply with all state laws, consumer protection standards and state benefit mandates and whether they would be required to pay state fees and taxes that are levied on other insurers to help offset the costs of exchange operations.
In a recent letter to OPM, the National Association of Insurance Commissioners expressed concern about the possibility of a double standard, the Times reports. NAIC said, "It is absolutely essential that multistate plans compete on a level playing field with other qualified health plans, which are subject to state insurance law." Some consumer groups also have echoed such concerns.
White House officials have said that rules for the plans, which the administration has been reviewing for the past three months, will be issued soon (Pear, New York Times, 10/27).