ONTD Political

U.S. Set to Sponsor Health Insurance

1:49 pm - 10/29/2012
U.S. Set to Sponsor Health Insurance

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.

John J. O’Brien, the director of health care and insurance at the agency, said the new plans would be offered to individuals and small employers through the insurance exchanges being set up in every state under the 2010 health care law.

No one knows how many people will sign up for the government-sponsored plans. In preparing cost estimates, the Obama administration told insurers to assume that each national plan would have 750,000 people enrolled in the first year.

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.

Richard G. Miles, the association’s president, expressed interest in offering a multistate plan to the general public through insurance exchanges, but said no decision had been made.

“Our expertise in the Federal Employees Health Benefits Program would be useful in the private marketplace,” Mr. Miles said in an interview. “But we are concerned about the underwriting risk in providing insurance to an unknown group of customers.”

To be eligible to participate in the multistate program, insurers must be licensed in every state. The Government Employees Health Association recently bought a company that has the licenses it would need.

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.

Consumer groups expressed similar concerns. The national insurance plans and other carriers must be subject to identical standards, they say, or consumers cannot make valid comparisons.

“Multistate plans have real potential benefits for consumers,” said Ronald F. Pollack, the executive director of Families USA, a liberal-leaning consumer group. “But there is also potential trouble if the multistate plans are exempted from some consumer protection standards.”

Robert E. Moffit, a senior fellow at the conservative Heritage Foundation, said he worried that “the nationwide health plans, operating under terms and conditions set by the federal government, will become the robust public option that liberals always wanted.”

Insurers are pleading with the Office of Personnel Management to provide more detailed guidance.

“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.


OP: So, what do you all think? Can these two national plans be considered the public option or are they going to force the other insurance companies to play on a national level? For those of you outside the US, laws were passed that forbid national plans and, at most, the companies compete with one or two other insurers (which is why insurance is expensive here -- they have a near monopoly.)
shortsweetcynic 29th-Oct-2012 08:55 pm (UTC)
I don't know, but I'm intrigued. I've made it a personal goal to find health insurance one way or the other by the time the new year rolls around, and I'm genuinely curious how this is going to play into that.

I think it's about as close to public option as we'll get.
maynardsong 29th-Oct-2012 10:41 pm (UTC)
Can this happen before December 13 that would be awesome.
bushy_brow 29th-Oct-2012 11:45 pm (UTC)

ETA: I hope Texas doesn't find a way to screw this up, but I'm sure it will. :-/

Edited at 2012-10-29 11:46 pm (UTC)
sarien 30th-Oct-2012 12:58 am (UTC)
Thank you for reminding me that I live in Texas now and we can't have nice things because of idiots in charge (and people who vote for said idiots).
caerfrli interstate insurance could be a disaster.29th-Oct-2012 11:49 pm (UTC)
If all insurance companies could sell across state lines they'd all move their headquarters to the state that benefits the companies the most and the policy holders the least, just as banks and credit card companies have done.
furrygreen Re: interstate insurance could be a disaster.30th-Oct-2012 04:30 am (UTC)
As opposed to how it is now in with insurance companies have almost absolutely zero competition and are allowed to charge whatever the hell the want? Actually, this is how it already is with insurance companies. ;P You just don't realize it because there is no competition. I mean, look at car insurance. The sky hasn't fallen because car insurance companies compete nationally.
tabaqui 30th-Oct-2012 12:38 am (UTC)
I hope this works and we can find health insurance we can afford. Sick to death of not having any and always being paranoid about 'what if my daughter gets hurt/really sick?'
jwaneeta 30th-Oct-2012 01:02 am (UTC)
ebay313 30th-Oct-2012 04:23 am (UTC)
"laws were passed that forbid national plans and, at most, the companies compete with one or two other insurers"

Are you talking about at a national level? This seems to be similar to what Mitt Romney said in one of the debates about current limits on the number of insurance companies (he claimed two) limiting the free market, which I didn't understand at the time and am clearly still confused about. Could someone please elaborate on this?
furrygreen 30th-Oct-2012 04:41 am (UTC)
Although there are insurance companies that have various branches in multiple states (let's say BCBS), you can't buy a BCBS policy from another state even if BCBS is the only insurance company in your state. So, BCBS policy in the next state over may be $100 a month cheaper for the exact same policy in the other state but that's SOL for you. Most states have only two or so insurance companies that you can get policies from so it's a near monopoly across the board (this doesn't include medicare, medicaid, or gov'n insurance.)

As for Mitten's talking about this, well, that's more of Mitten's BS. It was set up this way via the healthcare industry lobbyists. I'm sure it went something like "if there is competition, patient quality care will go down". Mitten's wouldn't change this.
baked_goldfish 30th-Oct-2012 04:41 am (UTC)
Everyone I know with GEHA loves that shit. Anecdote, I know, but still.
liz_marcs 30th-Oct-2012 02:54 pm (UTC)
*raises hand*

And I will back you. My family had it while I was growing up. My parents have it as retirees. Best damn thing ever.
sashafarce 30th-Oct-2012 04:50 am (UTC)
I wonder what happens to PCIP (if anything) with this plan. Is this supposed to be happening soon or in 2014? Will they take pre-existing conditions or will that too wait until 2014? I have PCIP (pre-existing temporary plan mandated under the ACA and it is slow but has literally saved my life) but my mom loses Medicaid eligibility in January and the only thing that keeps her alive is a once-weekly outpatient visit to the hospital that she will no longer be able to go to. Something needs to be done about people who fall into the cracks and I hope something like this will be what helps.
boundbyash 30th-Oct-2012 05:25 am (UTC)
As a Canadian who has been trying to follow the health care debate in the U.S., I find some of this confusing. For instance - is the federal government going to offer health plans that the American people will have to pay for, or will the plans be free? If they're not free, what is the difference between them and regular health plans? I thought the original goal was to provide health care insurance to the millions of Americans who don't have any; if they have to pay for this federal health insurance, what has changed? I'm sure I'm missing something, I just don't know what.

As a point of reference, I am using to a system where the provincial government runs a health plan that covers everyone in that province, and the plan is transferrable to any province in the Country. There is no charge for this plan. (Doctors, medical tests, surgeries, hospital stays and more are all included at no charge - we do however have to pay for prescription meds, although those who work and have a good health plan often have these costs defrayed.
furrygreen 30th-Oct-2012 06:44 am (UTC)
is the federal government going to offer health plans that the American people will have to pay for, or will the plans be free?

We'll probably have to pay the bi-monthly premiums and will have a co-pay. What the gov'n is doing, I think, is trying to force the companies into a free market system. Right now in the US, we can't buy insurance from other states (even if it's from the same company.) There are usually only a handful of insurance companies in state so it's a monopoly. That's the reason HC is so god damn expensive and we get such crappy care. I mean, what are we going to do? Go without? Ha.

A public option (a gov'n healthcare plan) was shot down but I think these two plans will probably work about the same. As in, if the other companies want to stay in business, they'll have to compete with the two national plans. And since those two plans will be national, they'll have more subscribers and will thus be cheaper over all.

But it won't be free for the majority. Later on, the bill has provisions that'll help keep costs down, but those are years in the future. (eg, forcing everyone to buy insurance, limit the amount of profit a company can make, pay in terms of results and not procedures, accepting everyone and charging all the same, and higher taxes on higher paying plans are a couple.)

If they're not free, what is the difference between them and regular health plans?

You'd have to read what they offer to know the difference. Each company covers different things. You don't get everything when you buy insurance from a company. Usually, you have the premium to pay every two weeks, a co-pay, and then it'll go down a list. Ah, like, it'll pay 80% of an ER visit up to a limit (say 10k or something) or it'll pay 75% of the cost of drugs. A lot of companies have yearly and lifetime limits in what they'll pay.

if they have to pay for this federal health insurance, what has changed?

The law will force people to buy insurance from one of the various companies. They did this to forestall the "we can't afford to take on the sick people" and the "healthy people won't buy the insurance" whining.
atomic_joe2 30th-Oct-2012 09:34 am (UTC)
I see some of the comments on here and I am reminded of how lucky I am to have the system we have in Britain.

Sure it's not perfect, and nobody is suggesting it is, but we're still incredibly lucky.
moonshaz 31st-Oct-2012 03:54 am (UTC)
Sure it's not perfect, and nobody is suggesting it is, but we're still incredibly lucky.

That you are! :)
(no subject) - Anonymous
furrygreen Re: A question30th-Oct-2012 03:49 pm (UTC)
No. Pre-existing condition only refers to medical problems that happened *before* you were covered under an insurance plan. If you had coverage when you got hurt then it's not a pre-existing condition. If you have a condition you didn't tell your insurance company about that happened before you were insuranced by your current insurance than you do have a pre-existing condition (and god help you if they find out. XD)

If you quit or lose your insurance then this becomes a pre-existing condition to whatever insurance plan you're trying to get on in the future. In other words, until the further out Obamacare provisions come into law, don't quit your job and/or try as hard as you can to not be laid off or fired.
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