Action on Multi-State Plans, But Still No Specifics

Just last week the U.S. Office of Personnel Management (OPM) released a draft application for health insurers seeking to qualify as “Multi-State Plans.” These Multi-State Plans—created as part of the Affordable Care Act (ACA)—were initially included at the request of Senator Olympia Snowe (R-Maine), who believed they would spur competition in highly concentrated insurance markets, such as her home state of Maine. (For an overview of Multi-State Plans, check out Tim Jost’s analysis on the Health Affairs’ blog.)

The goal of the provision is well-intentioned: to provide consumers with alternative health insurance options that have been vetted and approved by OPM, which manages health plans for federal employees, including Members of Congress. But consumer advocates and state insurance regulators have raised concerns about the possibility that the Multi-State Plans could preempt state-based consumer protections and undermine the efforts of state exchanges to use  active purchasing strategies to help consumers and small businesses access higher-value insurance products. In addition, as the National Association of Insurance Commissioners (NAIC) put it in an August 10 letter to federal regulators, “exempting Multi-State Plans from the additional consumer protections a state has put in place will confuse consumers, leave some consumers with less protection than others and result in an unlevel playing field that could give the largest insurers additional competitive advantages in the marketplace, thereby undermining the goal of the [ACA] to create more competition in health insurance markets and strengthen consumer protection.”

Advocates and state officials have argued that Multi-State Plans should be subject to all state licensing requirements and insurance rules, including solvency regulation, rate and form review, as well as any ongoing oversight by the state insurance department. And, to participate in state-based exchanges, Multi-State Plans should meet any and all exchange requirements, in addition to the minimum standards imposed by OPM.

The draft application issued by OPM doesn’t address these concerns directly, although OPM indicates its intent to “work cooperatively with the States…to ensure a level playing field…and avoid disruption of State health insurance markets.”  They also note that they will “strive to balance State needs with OPM’s statutory obligation to implement and oversee the [Multi-State Plan Program].” In addition, the application materials suggest OPM intends to hold a high bar for plans, with requirements for network adequacy, marketing, customer service, and quality that exceed many state standards.

Despite these pledges to work with states and ensure a level playing field, important questions remain. These questions include:

  • Will Multi-State Plans be subject to the state’s essential health benefits (EHB) benchmark standard, or a different one, established by OPM?
  • Will Multi-State Plans be subject to any additional contracting requirements imposed by a state’s exchange? For example, the Massachusetts Connector requires participating plans to offer a standardized set of benefit designs to help consumers make “apples-to-apples” comparisons among health plan options (learn more here). Will Multi-State Plans be exempted from that requirement?
  • Will Multi-State Plans be required to submit to state market conduct exams? Or other ongoing state oversight and enforcement requirements?

OPM intends to issue a regulation that should answer these and many other questions. Hopefully they will do so soon so that state officials, consumer advocates, and other stakeholders have time to weigh in. Count on CHIRblog to keep you updated on the status of Multi-State Plans and everything else you need to know about health reform in our series on “Implementing the ACA.”