The New York Times, by Robert Pear – October 27, 2012
Washington – The Obama administration will soon take on a new role as the sponsor of at least two nationwide health insurance plans to be operated under contract with the federal government and offered to consumers in every state.
These multistate plans were included in President Obama’s health care law as a substitute for a pure government-run health insurance program – the public option sought by many liberal Democrats and reviled by Republicans. Supporters of the national plans say they will increase competition in state health insurance markets, many of which are dominated by a handful of companies.
The national plans will compete directly with other private insurers and may have some significant advantages, including a federal seal of approval. Premiums and benefits for the multistate insurance plans will be negotiated by the United States Office of Personnel Management, the agency that arranges health benefits for federal employees.
Walton J. Francis, the author of a consumer guide to health plans for federal employees, said the personnel agency had been “extraordinarily successful” in managing that program, which has more than 200 health plans, including about 20 offered nationwide. The personnel agency has earned high marks for its ability to secure good terms for federal workers through negotiation rather than heavy-handed regulation of insurers.
Under the Affordable Care Act, at least one of the nationwide plans must be offered by a nonprofit entity. Insurance experts see an obvious candidate for that role: the Government Employees Health Association, a nonprofit group that covers more than 900,000 federal employees, retirees and dependents, making it the second-largest plan for federal workers, after the Blue Cross and Blue Shield program.
The association, with headquarters near Kansas City, Mo., was founded in 1937 to help railway mail clerks with their medical expenses, and it generally receives high scores in surveys of consumer satisfaction.
The new health care law stipulates that at least one of the multistate plans must provide insurance without coverage of abortion services. If a plan does cover abortions, it must establish separate accounts, one with money for abortion and one for all other medical services.
National insurance plans will be subject to regulation by the federal government, state insurance commissioners and state insurance exchanges. That mix could cause confusion for some consumers who have questions or complaints about their coverage.
The federal standards will pre-empt state rules in at least one respect: the national health plans will automatically be eligible to compete against other private insurers in the new exchanges, regardless of whether they have been certified as meeting the standards of those exchanges.
The administration has promised to “work cooperatively with states.” But it is unclear whether the government-sponsored plans will have to comply with all state laws and consumer protection standards; whether they will have to comply with state benefit mandates; and whether they will have to pay state fees and taxes levied on other insurers to finance exchange operations.
The National Association of Insurance Commissioners, which represents state regulators, expressed alarm at the prospect of a double standard. “It is absolutely essential that multistate plans compete on a level playing field with other qualified health plans, which are subject to state insurance law,” the association said in a letter to the Office of Personnel Management.
“We are concerned that O.P.M. has not yet released rules specifying the requirements for the multistate plan,” said Jay A. Warmuth, a lawyer at UnitedHealth Group, one of the nation’s largest insurers.
Rules for the new program have been under review by the White House for three months, and officials said they would be issued soon.
