Tuesday, July 14, 2015

Competition for Multi State Health Care Plans? : ACA IS Single Payer

The authors of this article certainly have good ideas that will effect our health care system by bring in competition so as not to allow consolidation of the insurance industry, and eventually all insurance under one roof, the federal government, but the idea that the Obama administration will allow competition to exist begs a "suspension of disbelief ".

The free market would be the death of ObamaCare as it not based on competition, it is designed to force everyone into one totally control organization that has the power to dictate outcomes. The entire idea of ObamaCare is to eliminate options for citizens to chose what health care system is best for them, and thereby becoming completely dependent, subsidized and marginalized.

Will Competition Arise for Multi-State Health Plans?
Source: Neil R. Meredith and Robert E. Moffit, "Will competition arise for multi-state health plans?" Cato Institute, Summer 2015.

July 13, 2015

The Affordable Care Act (ACA) established the Multi-State Plan (MSP) program which requires that two or more national insurance carriers offer coverage on health insurance exchanges in all 50 states and Washington, D.C. However, recent regulations are unlikely to make the MSP program a robust platform for health insurance competition, writes Neil Meredith and Robert Moffit of the Cato Institute.  The Office of Personnel Management (OPM) has broad administrative authority to negotiate the terms and conditions for the MSPs:
  • The plan must offer coverage in every health exchange by the fourth year of coverage.
  • This requirement may damage competition because smaller insurers are not as likely to be able to form the necessary infrastructure in that short time span.
  • This may deliver more market power to larger insurers.
The MSP program requires at least two MSP options on all 51 exchanges with at least one non-profit option. As a result, it is difficult for for-profit insurers to participate and provide competition.
The OPM should consider measures to promote competition by:
  • Reevaluating the rule that MSP providers make coverage available on all 51 exchanges;
  • Placing representation of ordinary consumers rather than special interests on the MSP Program Advisory board;
  • Reducing user fees temporarily for new issuers;
  • Conducting a Regulatory Impact Assessment (RIA) if the proposed regulatory changes have an economic effect of $100 million or more.
Since the pool of MSP competitors is reduced because of requirements that confine participation to large insurers it could lead to health plan consolidation rather than competition. As such, the MSP program could lay the ground work for the public option championed by the Obama administration.

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