The Multi-State Plans Unveiled

They’re finally here – the Multi-State Plans (MSPs). Intended by Congress to inject new competition into state health insurance markets, the MSP options were unveiled yesterday by the U.S. Office of Personnel Management (OPM). The agency promises that consumers will have more than 150 MSP options in 30 states and the District of Columbia. Within the next four years, there should be MSP options in all 50 states.

But that doesn’t mean these states will see new competition. Turns out, the company behind these “new” plan options is the Blue Cross Blue Shield Association and its state-based Blue Cross Blue Shield affiliates. There’s great irony here. Many states with highly concentrated insurance markets have been hungry for new competition and new plan options.  But in most of these states, the reason the insurance market is so highly concentrated is because Blue Cross Blue Shield is the dominant player. With the MSPs, the Blues will be offering variants of plans they’re already offering. So this program is not exactly a game-changer. While Congress intended the program to include two different companies, it was only Blue Cross Blue Shield that crossed the finish line for 2014. OPM reports they are working with other insurers in an effort to have two companies in the program by 2015.

What does this mean for consumers? First, consumers who purchase these plans may gain some peace of mind from the fact that they have been vetted by OPM, which has a long history running the Federal Employees Health Benefits Program (FEHBP), the health benefits program for members of Congress and their staff. In particular, OPM is requiring the MSPs to submit to a federal external review process, should a dispute arise between the plan and an enrollee.

Second, OPM has reported that many of these plans will offer consumers access to a nationwide network of providers. Assuming this means access to in-network cost-sharing across states, this feature could offer important financial protection for people who spend time in different states during the year. These could be “snowbirds” who summer in the north and winter in the south, or families with children in school in another state, or people with seasonal jobs demanding travel from state-to-state.

To see whether there will be MSP options in your state, check out this interactive map.

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