The Affordable Care Act provision that encouraged the creation of multi-state health plans to increase competition in the health insurance market appears to be falling flat.
The concept is designed to mitigate the effect of single-insurer dominance over the individual and small-business markets in some states, Kaiser Health News reports in an article published by USA Today. Yet while the ACA said there must be at least two multi-state plans available to consumers in 31 states by 2014 and in all states by 2017, federal officials and experts say it's not likely the 2017 goal will be met. Only 480,000 out of the 9 million people currently covered through the ACA marketplaces have multi-state plans.
The federal Office of Personnel Management, which oversees the multi-state plan program, does not have the authority to compel insurers to offer such plans, according to KHN. The Blue Cross Blue Shield Association (BCBS) had offered about 150 multi-state plans, but an Avalere analysis of 2015 ACA health plans found that compared to comparable regular Blues plans, the Blue's multi-state plans typically had higher premiums. BCBS, which has since discontinued some of its multi-state plans, did not respond to KHN's requests for comment.
"It's too hard to find an insurer who could suddenly compete across the breadth of states and do better on rates than existing insurers," Linda Blumberg, a senior fellow at The Health Policy Center at the Urban Institute, tells KHN. In states where an insurer already has an established provider network, she adds, it is unlikely to want to compete with its own products.
A coalition of consumer-operated and oriented plans agreed in 2015 to sell multi-state plans, the article notes, but several CO-OPs have since had to shut down.
A report this past January from two George Mason University economists also cast doubt on the viability of the ACA's multi-state plan program. They argued that the plan "may lead to further consolidation of the health insurance industry despite the program's stated goal of increasing competition by means of health insurance exchanges."
To learn more:
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