Reform Update: Blues wins first federal contract to offer multistate plans on insurance exchanges
10/01/2013 - ModernHealthcare.com. By Maureen McKinney.
WASHINGTON, DC - The Blue Cross and Blue Shield Association is the first insurer to receive a federal contract to offer individual insurance coverage options across a majority of state insurance exchanges in 2014, as part of a program to boost competition and consumer choice under the Patient Protection and Affordable Care Act.
In a Monday announcement, the U.S. Office of Personnel Management, which will administer the multistate plan program, said the Blues will offer more than 150 plan options in 30 states as well as in the District of Columbia.
The multistate plans will be available on Oct. 1, when the exchanges' six-month open enrollment period begins, and coverage will begin on Jan. 1, said the OPM, which also runs the health benefits program for federal employees.
The Blue Cross and Blue Shield Association cheered the federal government's announcement and said it will offer a wide range of plans, including PPOs and HMOs, as part of its multistate options. Some of those plans will have national provider networks, said Alissa Fox, the Blues' senior vice president of policy and representation. With this latest contract, the Blues will be offering plans on nearly every state exchange, Fox added.
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The healthcare reform law requires that multistate plans, or MSPs, be offered in at least 60% of states in 2014. By 2017, the law mandates that there be two multistate plans operating in each state exchange. The provision partly replaced the Democrats' controversial proposal to offer a Medicare-type public insurance option on each exchange to foster greater competition between health plans.
“Without the MSP option, in three states (Alaska, New Hampshire and West Virginia), there would be only one type of insurance plan for consumers to consider,” the OPM said in the announcement. “Additionally, MSP options will be offered in 10 federally facilitated marketplaces where there are five or fewer issuers offering qualified health plans.”
Federal officials said the multistate plan would also be in operation next year in Arkansas, California, Colorado, Delaware, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Mexico, New York, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin.
Observers had predicted Blue Cross and Blue Shield would receive an MSP contract, according to Sabrina Corlette, a research professor and project director at the Health Policy Institute at Georgetown University, Washington, D.C. “I think folks who are watching this issue closely are not terribly surprised that the Blues were named as an issuer,” Corlette said.
She also predicted that the Blues would be the only multistate issuer for 2014, despite the ACA's requirement that OPM certify at least two such companies.
Federal officials declined to confirm whether the Blues' application would be the only one approved for 2014's multistate plan program. But on the eve of the start of open enrollment on the exchanges, they offered no indication that they would award contracts to any other insurers.
Despite the program's intent, Corlette said it does little to address fundamental obstacles to competition among insurers, namely the challenges of “building and sustaining a competitive network.” Interest in the program may, however, ramp up in 2015, she said.