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PPACA: What's Up with the Multi-State Plans?

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House Republicans and Republican state officials have been fighting to block implementation of the Patient Protection and Affordable Care Act of 2010 (PPACA) and funding of PPACA implementation.

The Republicans at the House Ways and Means Committee health subcommittee took a different approach — objecting to what they are delays in efforts by the U.S. Department of Health and Human Services (HHS) to implement PPACA — Wednesday at a hearing on implementation of the PPACA health insurance exchange regulations and related regulations.

One of the witnesses who appeared at the hearing Wednesday, Michael Consedine, the Pennsylvania insurance commissioner, talked about the effects of the delays on state regulators.

While talking generally about areas of confusion, he raised questions about what could be a huge new PPACA-related program — the multi-state plan (MSP) program — and whether MSPs could end up having an unfair edge over traditional single-state plans.

If HHS runs a state’s exchange program “will the multi-state insurance plans be required to adhere to all applicable Pennsylvania insurance laws?” Pennsylvania asks in an appendix included with a written version of his remarks posted on the Ways and Means website. 

Nevada exchange organizers recently complained about having to make decisions about their state’s exchange program without having all of the answers they would like from HHS.

At the Ways and Means hearing, Consedine said HHS itself put about 100 references to regulations or batches of advice that were still in the works in the final rule on setting up an exchange. HHS still has not published any of those regulations, Consedine said. 

Two weeks ago, Pennsylvania sent HHS Secretary Kathleen Sebelius a list of 26 questions about the exchange program, including the questions about MSPs, Consedine said.

“As of the date of this testimony, HHS has not responded to our letter,” Consedine said.

States do not know, for example, how much say they will have and how much say HHS officials will have over a state’s “essential health benefits” benchmark, or the set of requirements that describes the benefits that a plan sold through an exchange must offer, Consedine said.

“At this point, any inference that states have binding decision-making authority on the issue appears to be an illusion,” Consedine said.

In the testimony appendix, Consedine listed the questions Pennsylvania has asked Sebelius.

The MSP questions refer to a PPACA provision that calls for the U.S. Office of Personnel Management (OPM) to create an MSP program that will provide the same kind of coverage that federal employees get.

Each state’s health insurance exchange, or Web-based health insurance supermarket, is supposed to make at least one slot available to a nonprofit MSP and a second slot available to another MSP.

PPACA also is creating another new type of plan, the CO-OP plan, that is supposed to be a nonprofit, member-owned cooperative with no ties to existing health insurers.

The MSP program could, apparently, be open to Blue Cross and Blue Shield plans, publicly traded health insurers, and other existing carriers.

Officials are hoping to have MSPs available in 60% of the states in 2014 and in all states within 4 years after the exchanges start up.

So far, OPM officials have said little about the MSP program.

“When will the rulemaking detailing the operation of the multi-state insurance plans be released?” Pennsylvania has asked Sebelius. 

The state also is asking whether the MSPs will have to meet the same standards that other plans sold through a state’s exchange will have to meet.

Both critics and supporters of PPACA have pointed out that differences in the standards plans must meet could lead to some plans ending up with an unusually high percentage of sick enrollees.