[Senate Report 115-277]
[From the U.S. Government Publishing Office]
Calendar No. 468
115th Congress } { Report
SENATE
2d Session } { 115-277
_______________________________________________________________________
REPEAL INSURANCE PLANS OF THE
MULTI-STATE PROGRAM ACT OF 2017
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
WITH ADDITIONAL VIEWS
to accompany
S. 2221
TO REPEAL THE MULTI-STATE PLAN PROGRAM
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
June 18, 2018.--Ordered to be printed
_________
U.S. GOVERNMENT PUBLISHING OFFICE
79-010 WASHINGTON : 2018
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota KAMALA D. HARRIS, California
STEVE DAINES, Montana DOUG JONES, Alabama
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Joshua P. McLeod, Professional Staff Member
Margaret E. Daum, Minority Staff Director
Stacia M. Cardille, Minority Chief Counsel
Charles A. Moskowitz, Minority Senior Legislative Counsel
Thomas J.R. Richards, Minority Professional Staff Member
Laura W. Kilbride, Chief Clerk
Calendar No. 468
115th Congress } { Report
SENATE
2d Session } { 115-277
======================================================================
REPEAL INSURANCE PLANS OF THE MULTI-STATE PROGRAM ACT OF 2017
_______
June 18, 2018.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 2221]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 2221) to repeal the
multi-State plan program, having considered the same, reports
favorably thereon with an amendment in the nature of a
substitute and recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................6
IV. Section-by-Section Analysis......................................7
V. Evaluation of Regulatory Impact..................................7
VI. Congressional Budget Office Cost Estimate........................7
VII. Additional Views.................................................9
VIII.Changes in Existing Law Made by the Bill, as Reported...........14
I. PURPOSE AND SUMMARY
S. 2221, the Repeal Insurance Plans of the Multi-State
Program Act, or the RIP MSP Act, repeals the Multi-State Plan
(MSP) Program authorized under Section 1334 of the Patient
Protection and Affordable Care Act (ACA). The MSP Program is
not meeting statutory requirements under the ACA and
eliminating this program will allow the Office of Personnel
Management (OPM) to focus on mission-critical programs.
II. BACKGROUND AND THE NEED FOR LEGISLATION
On March 23, 2010, President Barack Obama signed the ACA
into law.\1\ The MSP Program mandated by the ACA was intended
to increase competition and provide greater insurance choices
for consumers.\2\ To accomplish this task, Section 1334
authorized the Director of OPM to contract with health insurers
to offer at least two multi-state plans on state exchanges for
individual or group coverage, thereby competing against other
plans offered through the exchanges.\3\ Section 1334 required
issuers to be licensed in each state and subject to all the
requirements of state law while complying with minimum
standards established under chapter 89 of title 5, United
States Code, as well as any other requirements as determined by
the Director. OPM was granted a phase-in period for the multi-
state plans with coverage of 60 percent of the states in the
first year, 70 percent of states in the second year, 85 percent
of states in the third year, and all states in each subsequent
years.
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\1\Patient Protection and Affordable Care Act, Pub. L. No. 111-148,
124 Stat. 119 (2010); see also H.R. 3590--Patient Protection and
Affordable Care Act, Congress.gov, https://www.congress.gov/bill/111th-
congress/house-bill/3590/all-actions (last updated Mar. 23, 2010).
\2\U.S. Off. of Pers. Mgmt., A New Day for Federal Service: An
Overview of the Multi-State Plan Program (2014), https://
marketplace.cms.gov/technical-assistance-resources/multistate-plan-
program.pdf; see also Robert Moffit, Will This Little-Known Obamacare
Provision Lead to a Public Option?, Daily Signal (Jan. 15, 2015),
http://dailysignal.com/2015/01/15/will-little-known-obamacare-
provision-lead-public-option.
\3\Patient Protection and Affordable Care Act Sec. 1334.
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Section 1334 was inserted into the ACA by former Senate
Majority Leader Harry Reid during floor consideration after the
legislation passed the Senate Finance Committee.\4\ Due to its
late addition, there was little debate on the merits of
creating the MSP program or whether it could meet the stated
objective of offering increased competition and more choice.\5\
Politico reported on the rushed origins of the program, stating
things happened so fast that there was little time for a
robust, thoughtful conversation.\6\
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\4\Moffit, supra note 2.
\5\See Robert Moffit, Dan Blair & Linda Springer, The Office of
Personnel Management: A Power Player in America's Health Insurance
Markets?, Heritage Found. (Feb. 19, 2010), https://www.heritage.org/
health-care-reform/report/the-office-personnel-management-power-player-
americas-health-insurance.
\6\Sarah Kliff, No, The Public Option is Not Back From the Dead,
Wash. Post: Wonkblog (Oct. 30, 2012), https://www.washingtonpost.com/
news/wonk/wp/2012/10/30/no-the-public-option-has-not-returned-from-the-
dead/?utm_term=.f7fddd750b03.
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News that some members of Congress were nearing an
agreement to create the MSP Program became public in December
2009 when Majority Leader Reid announced that a health reform
working group of ten senators had arrived at a ``tentative
consensus `that includes a public option.'''\7\ The working
group Majority Leader Reid referenced explored several reform
options before settling on the MSP Program. One proposal under
discussion by the working group was a public option; however a
public option in which the government acted directly as the
issuer did not have enough support to pass through Congress.\8\
As a result, Senator Chuck Schumer (D-N.Y.) worked with nine of
his colleagues to come up with a backup plan to the public
option.\9\ One alternative under consideration by the working
group was the MSP Program through which OPM would work with
private insurers to offer health insurance plans to compete
with other plans available on state exchanges.\10\ Another
alternative was allowing individuals over the age of 55 to
enroll in Medicare.\11\ It was reported that key senators
withheld support for the second idea, leaving the MSP Program
all that remained.\12\ With a public option in which the
government played the role of insurer off the table, the MSP
Program was added to the ACA as the public option backup plan,
described by some as a ``sort of a catch-all for a lot of
different ideas.''\13\
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\7\Timothy Noah, Medicare Buy-in, RIP, Slate: Public Option Wiki
(Dec. 14, 2009), http://www.slate.com/articles/news_and_politics/
prescriptions/2009/12/public_option_wiki.html.
\8\Kliff, supra note 6.
\9\Id.
\10\Id.
\11\Id.
\12\Id.
\13\Rachana Pradhan & Paul Demko, Another Piece of Obamacare Falls
Short, Politico (Sept. 7, 2016), http://www.politico.com/story/2016/09/
obamacare-falls-short-227854.
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The MSP Program Is Failing To Increase Competition and Choice
The MSP Program was created to increase both competition
and choice in state health care exchanges.\14\ Section 1334 of
the ACA requires the availability of two MSP plans in all 50
states by 2017.\15\ Additionally, the law requires OPM to
contract with at least one non-profit provider, and to ensure
that at least one MSP option does not provide abortion
coverage.\16\ However, only one issuer association--the Blue
Cross Blue Shield Association (BCBSA)--has ever participated in
the MSP Program.\17\ BCBSA already had a significant market
share in the states that previously participated in the MSP
Program,\18\ and has approximately 70 percent of the market
share in the one remaining state participating.\19\
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\14\S. Rep. No. 111-89 (2009); see also Sabrina Corlette, The
Multi-State Plans Unveiled, Geo. U. Ctr. On Health Ins. Reforms Blog
(Sept. 30, 2013), http://chirblog.org/multi-state-plans-unveiled/.
\15\Patient Protection and Affordable Care Act Sec. 1334.
\16\Id.
\17\Patient Protection and Affordable Care Act Sec. 1334; see also
U.S. Off. of Pers. Mgmt., supra note 2; U.S. Off. of Pers. Mgmt.,
Multi-State Plan Program and the Health Insurance Marketplace: FAQs,
https://www.opm.gov/healthcare-insurance/multi-state-plan-program/
consumer/?page=1#url=FAQs (last visited Apr. 4, 2018).
\18\S. Rep. No. 111-89 (2009); see also Corlette, supra note 13.
\19\Christine Monahan, Oh Where, Oh Where Are The Multi-State
Plans?, Geo. U. Ctr. On Health Ins. Reforms Blog (June 6, 2013), http:/
/chirblog.org/oh-where-oh-where-are-the-multi-state-plans/; see also
Sarah Goodell, The Multi-State Plan Program (Updated), Health Affairs
(May 29, 2014), https://www.healthaffairs.org/do/10.1377/
hpb20140529.10243/full/.
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In the 2014 plan year, OPM contracted with one group of
issuers to offer more than 150 MSP options in 31 states,
including the District of Columbia. The Obama Administration
``told insurers to assume that each national plan would have
750,000 people enrolled in the first year.''\20\ However,
approximately 350,000 individuals enrolled in an MSP option in
2014. For plan year 2015, MSP coverage expanded to 36 states
and 437,000 individuals.\21\ For plan year 2016, MSP covered
approximately 375,000 individuals in 33 states, and in 2017 the
MSP enrollment fell to 290,000 individuals in 22 states.\22\ By
2018, only one state--Arkansas--covering approximately 55,000
individuals was participating in the MSP Program.\23\
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\20\Robert Pear, U.S. Plans to Unveil New Insurance Options, N.Y.
Times (Sept. 29, 2013), https://www.nytimes.com/2013/09/30/us/politics/
us-plans-to-unveil-new-insurance-options.html?mcubz=0.
\21\Document productions from U.S. Off. of Pers. Mgmt. provided to
S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6, 2017 and Feb.
13, 2018) (on file with S. Comm. on Homeland Sec. & Governmental Aff.).
\22\Id.
\23\Majority Cmte. staff call with Arkansas State Insurance
Department (Feb. 2, 2018).
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Five years after its implementation in 2014, the MSP
Program is both failing to fulfill program intent and to meet
statutory requirements. In regard to the statutory requirement
that all 50 states and the District of Columbia participate in
the MSP Program, with only one state participating, the program
has a state participation success rate of 1.9 percent.
A possible lack of issuer participation was a concern
foreshadowed by the Congressional Budget Office (CBO). Shortly
prior to passage of the ACA, CBO questioned the utility of the
MSP Program and whether issuers would participate.\24\ In a
2009 letter to Majority Leader Reid, CBO wrote:
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\24\Letter from Douglas W. Elmendorf, Dir., Cong. Budget Off., to
Harry Reid, Majority Leader, U.S. Senate (Dec. 19, 2009), http://
www.cbo.gov/sites/default/files/cbofiles/ftpdocs/108xx/doc10868/12-19-
reid_letter_managers_correction_noted.pdf.
[w]hether insurers would be interested in offering
[MSP] plans is unclear, and establishing a nationwide
plan comprising only nonprofit insurers might be
particularly difficult. Even if such plans were
arranged, the insurers offering them would probably
have participated in the insurance exchanges anyway, so
the inclusion of this provision did not have a
significant effect on the estimates of federal costs or
enrollment in the exchanges.\25\
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\25\Id.
At the time, CBO also estimated that the creation of the
MSP Program was ``unlikely to have much effect on average
insurance premiums because the existence of that public plan
would not substantially change the average premiums that would
be paid in the exchanges.''\26\
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\26\Id.
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In evaluating the merits of this legislation, CBO found
that eliminating MSPs would not affect Federal subsidies for
health insurance purchased through the marketplaces.\27\ CBO
also found that MSPs are not the lowest-cost or second-lowest
cost silver plans in any rating areas where they are
offered.\28\ Because of this, CBO confirmed:
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\27\Cong. Budget Off., Congressional Budget Office Cost Estimate:
S. 2221 Repeal Insurance Plans of the Multi-State Program Act of 2017
(2018), https://www.cbo.gov/publication/53621.
\28\Id.
[d]ata from HHS on enrollment in and premiums for
MSPs over a longer-period of time show that those plans
serve a small and declining percentage of people who
purchase coverage through the marketplaces. CBO and the
staff of the Joint Committee on Taxation do not expect
that eliminating such plans would affect the level of
competition in or average premiums for marketplace
coverage in future years.\29\
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\29\Id.
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The MSP Program Diverts OPM From Mission-Critical Programs That Serve
the Federal Workforce and Its Retirees
OPM supports passage of S. 2221, noting that ``[r]epealing
this statutory requirement would allow OPM to further
strengthen its capacity to meet the important needs of our
benefit programs serving the 2.7 million employees of the
Federal workforce and over 2 million Federal workforce
retirees.''\30\
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\30\E-mail from U.S. Off. of Pers. Mgmt. Staff to S. Comm. on
Homeland Sec. & Governmental Aff. Majority Staff (on file with S. Comm.
on Homeland Sec. & Governmental Aff.).
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Since 1978, OPM's core mission has been to serve the
Federal workforce and its retirees.\31\ The creation of the MSP
Program diverted OPM's focus from this mission by requiring OPM
to begin providing non-Federal services for the American
public.\32\ From fiscal year (FY) 2011 to FY 2017, OPM spent
$54 million in ``salaries and expenses'' to administer the MSP
Program.\33\ This funding supported 42 full-time equivalents in
FY 2017 alone.\34\
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\31\ Our Mission, Role & History, U.S. Off. of Pers. Mgmt., https:/
/www.opm.gov/about-us/our-mission-role-history/ (last visited Apr. 4,
2018).
\32\U.S. Off. of Pers. Mgmt., Congressional Budget Justification:
Fiscal Year 2018 2 (2017), https://www.opm.gov/about-us/budget-
performance/budgets/congressional-budget-justification-fy2018.pdf.
\33\Document production from U.S. Off. of Pers. Mgmt. provided to
S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6, 2017) (on file
with S. Comm. on Homeland Sec. & Governmental Aff.).
\34\Id.
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These additional resources were requested for the MSP
Program in the annual Congressional Budget Justification
instead of being requested for mission-critical programs that
serve the Federal workforce and its retirees. Diverting OPM
resources away from its core mission is significant given that
the agency is currently struggling to provide acceptable levels
of service to Federal employees.\35\ For instance, in FY 2017,
OPM requested $3.35 million less money to support processing of
its backlog of Federal retirement claims.\36\ At the same time,
OPM expended $10.3 million for MSP Program salaries and
expenses alone.\37\
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\35\For example, as of Dec. 31, 2017, OPM had an inventory of
14,515 unprocessed retirement claims. See Michael O'Connell, OPM Cuts
Retirement Backlog to its Lowest Level in More Than a Year, Fed. News
Radio (Jan. 5, 2018), https://federalnewsradio.com/retirement/2018/01/
opm-cuts-retirement-backlog-to-its-lowest-level-in-more-than-a-year/;
see also U.S. Off. of Pers. Mgmt. Statistical Abstracts: Fiscal Year
2016 (2017).
\36\U.S. Off. of Pers. Mgmt., Congressional Budget Justification:
Fiscal Year 2018 2 (2017), https://www.opm.gov/about-us/budget-
performance/budgets/congressional-budget-justification-fy2018.pdf.
\37\Document production from U.S. Off. of Pers. Mgmt. provided to
S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6, 2017) (on file
with S. Comm. on Homeland Sec. & Governmental Aff.).
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S. 2221 will allow OPM to focus exclusively on mission-
critical programs that benefit current members of the Federal
workforce, tribes and tribal organizations and retirees.
Lastly, the volume of staff devoted to the program is
disproportionate to the volume of people served. In 2018, 42
employees will serve no more than 55,000 participants in
Arkansas.\38\ The Federal Employee Health Benefits Program
(FEHBP), by comparison, has 117 full-time employees but serves
8.2 million people.\39\ Therefore, throughout most of the
program's existence, OPM has dedicated only 3.3 employees per
100,000 FEHBP enrollees while dedicating 14 employees per
100,000 MSP enrollees.
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\38\Majority Cmte. staff call with Arkansas State Insurance
Department (Feb. 2, 2018).
\39\See Kirstin B. Blom & Ada S. Cornell, Cong. Res. Serv., R43922,
Federal Employees Health Benefits (FEHB) Program: An Overview (2016),
https://fas.org/sgp/crs/misc/R43922.pdf.
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In 2018, OPM has been working to right-size its workforce.
However, prior to the reorganization, OPM requested in its FY
2018 congressional budget justification to support 72 full time
employees--which would have been an increase over the 42 full
time employees that served the program in FY 2014.\40\
Following the reorganization that began on April 1, 2018, OPM
is currently working to reduce the volume of Federal employees
working on the MSP Program by redirecting staff from the MSP
Program to mission-critical programs such as TRICARE and
FEDVIP.
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\40\U.S. Off. of Pers. Mgmt. briefing, majority staff (Nov. 20,
2017). See also Document production from U.S. Off. of Pers. Mgmt.
provided to S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6,
2017) (on file with S. Comm. on Homeland Sec. & Governmental Aff.).
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In addition to the MSP Program detracting from OPM's
mission-critical programs, the program continues to be a
concern for the OPM Office of Inspector General (OIG). In
December 2016, the OIG issued a Management Alert for the
program due to a lack of participation on the part of states
and providers, and confusion about the name incorrectly
signaling coverage would cross state boundaries when MSP
coverage does not.\41\ In FYs 2016 and 2017, the OIG also
included the program in its list of top management challenges
facing the agency.\42\ S. 2221 will allow OPM to focus
exclusively on mission-critical programs.
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\41\Memorandum from Norbert E. Vint, Deputy Inspector Gen., U.S.
Off. of Pers. Mgmt., Off. of Inspector Gen., to Beth F. Cobert, Acting
Dir., U.S. Off. of Pers. Mgmt. (Dec. 8, 2016), https://www.opm.gov/our-
inspector-general/reports/2016/management-alert-status-of-the-multi-
state-plan-program-4a-hi-00-17-013.pdf.
\42\ U.S. Off. of Pers. Mgmt. Off. of Inspector Gen., Top
Management Challenges: Fiscal Year 2017 (2017), https://www.opm.gov/
our-inspector-general/special-reports-and-reviews/fy2017-top-
management-challenges.pdf; see also Memorandum from Norbert E. Vint,
Deputy Inspector Gen., U.S. Off. of Pers. Mgmt., Off. of Inspector Gen.
to Beth F. Cobert, Acting Dir., U.S. Off. of Pers. Mgmt. (Oct. 12,
2016), https://www.opm.gov/our-inspector-general/special-reports-and-
reviews/fy2016-management-challenges.pdf.
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III. LEGISLATIVE HISTORY
S. 2221, the RIP MSP Act, was introduced on December 12,
2017, by Chairman Ron Johnson (R-WI). The bill was referred to
the Committee on Homeland Security and Governmental Affairs. On
April 25, 2018, Senator Lamar Alexander was added as a
cosponsor. On May 24, 2018, Senator James Risch joined as a
cosponsor. On June 12, 2018, Senators Rand Paul, John McCain,
and Steve Daines were added as cosponsors.
On June 8, 2018, the National Active and Retired Federal
Employees Association (NARFE) expressed NARFE's support for S.
2221 ``in order to redirect staff and budgetary resources from
the Multi-State Plan (MSP) Program to the Office of Personnel
Management's (OPM) core missions.''
The Committee considered S. 2221 at a February 14, 2018
business meeting. A substitute amendment offered by Chairman
Johnson extended from October 1, 2018 to January 1, 2019 the
date by which the MSP Program would end to align with the 2019
plan year. The substitute amendment also removed a rescission
of unused funds, and a related Sense of Congress, to ensure
Federal funds remain in OPM's control for authorized functions.
The substitute amendment was adopted by unanimous consent.
The Committee ordered S. 2221, as amended, reported
favorably, by a roll call vote of 10 ``yeas'' to 3 ``nays.''
Senators voting in the affirmative were Senators Johnson,
Portman, Paul, Lankford, Enzi, Hoeven, Daines, McCaskill,
Heitkamp, and Jones. Senators voting in the negative were
Senators Peters, Hassan, and Harris. For the record only,
Senator McCain voted ``yea'' by proxy and Senator Carper voted
``nay'' by proxy.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section establishes the short title of the bill as the
``Repeal Insurance Plans of the Multi-State Program Act'' or
the ``RIP MSP Act.''
Section 2. Repeal of Multi-State Plan Program
This section repeals section 1134, the Multi-State Plan
Program of the Patient Protection and Affordable Care Act
(Public Law 111-148), effective January 1, 2019. It requires
the OPM Director to brief the Committee on Homeland Security
and Governmental Affairs in the Senate and the Committee on
Oversight and Government Reform in the House of Representatives
not later than 60 days after the legislation is enacted. The
briefing must include information concerning how OPM and MSP
issuers are notifying current enrollees that there will no
longer be MSP options available; a description of how the OPM
Director will work with the Secretary of Health and Human
Services to ensure no MSP plans are made available; and a
timeline detailing how OPM will close the information
technology portal that MSP issuers utilize.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would impose no costs on
state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 27, 2018.
Hon. Ron Johnson, Chairman,
Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2221, the Repeal
Insurance Plans of the Multi-State Program Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Alice Burns.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 2221--Repeal Insurance Plans of the Multi-State Program Act of 2017
S. 2221 would repeal Section 1334 of the Affordable Care
Act (ACA), eliminating multi-state plans (MSPs) offered through
marketplaces established by the ACA. Under current law, the
Office of Personnel Management (OPM) contracts with private
insurers to offer MSPs; those plans may operate in one or more
states. The repeal would be effective January 1, 2019. Within
60 days of enactment, the bill also would require OPM to brief
the Senate Committee on Homeland Security and Governmental
Affairs and the House Committee on Oversight and Government
Reform on OPM's efforts to wind-down the program.
OPM reports that in 2018 Arkansas Blue Cross and Blue
Shield is the only insurer to offer MSPs and such plans are
only available in Arkansas. Premium data from the Department of
Health and Human Services (HHS) show that MSPs are not the
lowest-cost or second-lowest cost silver plans in any rating
areas where they are offered.\1\ Because premiums for silver
plans with the second-lowest-cost are the basis for calculating
federal subsidies for health insurance purchased through the
marketplaces, eliminating plans with premiums higher than those
second-lowest cost plans would not affect subsidies.
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\1\Silver plans cover about 70 percent of the costs of covered
benefits for people at most income levels.
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Data from HHS on enrollment in and premiums for MSPs over a
longer-period of time show that those plans serve a small and
declining percentage of people who purchase coverage through
the marketplaces. CBO and the staff of the Joint Committee on
Taxation do not expect that eliminating such plans would affect
the level of competition in or average premiums for marketplace
coverage in future years. Thus, implementing S. 2221 would not
have a significant effect on the federal budget.
The bill would not affect direct spending or revenues;
therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting S. 2221 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
S. 2221 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Alice Burns. The
estimate was approved by Leo Lex, Deputy Assistant Director for
Budget Analysis.
VII. ADDITIONAL VIEWS
ADDITIONAL VIEWS OF SENATORS CLAIRE McCASKILL, HEIDI HEITKAMP, AND DOUG
JONES
While the undersigned supported passage of S. 2221, the
Repeal Insurance Plans of the Multi-State Program Act, during
Committee consideration, our support was based on a recognition
that the Office of Personnel Management (OPM) does not have the
authorities needed to bring competition and choice into the
health insurance marketplace, as is required by statute, and
the Administration requests that the agency no longer be
required to administer the program. We do not support the
justification by the Majority that a lack of hearings, poor
vetting of the policy proposal, and a misalignment of mission
led to the failure of the Multi-State Plan program (MSPP).
Further, we disagree that there was a diversion of resources
from other insurance programs that lead to any unfulfilled
mission-requirements based on administration of the MSPP.
Lastly, the Senate Finance Committee and Senate Health,
Education, Labor, and Pensions Committee have the legislative
jurisdiction to stabilize the health insurance marketplace and
fix the Affordable Care Act. They are better suited than the
Senate Homeland Security and Governmental Affairs Committee to
address the challenges of consumer choice, plan competition,
high premium costs, and general market stabilization.
As the Congressional Budget Office (CBO) report for S. 2221
states, neither CBO nor the Joint Committee on Taxation
``expect that eliminating such plans would affect the level of
competition in or average premiums for marketplace coverage in
future years.''\1\
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\1\Congressional Budget Office, S. 2221, Repeal Insurance Plans of
the Multi-State Program Act of 2017 Cost Estimate (Feb. 2018)
(www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/
s2221.pdf).
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BACKGROUND
Section 1334 of the Affordable Care Act (ACA) created the
MSPP.\2\ This provision of the law required the Director of the
Office of Personnel Management (OPM) to contract with health
insurers to ``foster competition among plans competing in the
individual and small group health insurance markets.''\3\ S.
2221 would stop Section 1334 from having any force or effect of
law effective October 1, 2018, but the bill would not repeal
Section 1334, as is stated in its title.\4\
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\2\Pub. L. No. 111-148 (2010).
\3\Office of Personnel Management, Patient Protection and
Affordable Care Act, Establishment of the Multi-State Plan Program for
the Affordable Insurance Exchanges, 77 Fed. Reg. 72581 (Dec. 5, 2012)
(proposed rule).
\4\S. 2221, 115th Cong. (2017).
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The process by which this provision was included in the
bill is typical of the Senate floor amendment process. The
provision was included as part of a Manager's Amendment filed
by Senator Harry Reid on December 19, 2009, during floor
consideration and debate of the ACA.\5\ The provision directing
OPM to create the MSPP was devised by a bipartisan group of 10
Senators, and originally proposed by Senator Olympia Snowe (R-
ME) as an alternative to the public option.\6\ The provision
then became thought of as another way to interject competition
and choice into the health insurance exchanges ``modeled after
the federal employee benefits program.''\7\ Senators believed
OPM could leverage its contract negotiations experience from
running the Federal Employee Health Benefits Program (FEHBP)
for 50 years to help drive competition and choice in
marketplace Exchanges.\8\ In addition, the provision was
thought to offer plans that would cross State lines and avoid
individual State regulations, similar to the FEHBP National
Plan options, which would help keep premiums low and increase
plan choices.\9\
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\5\S. Amdt. 3276 to H.R. 3590 (December 19, 2009).
\6\Senators seek to put OPM in charge of health care public option,
Government Executive (Dec. 5, 2009) (www.govexec.com/federal-news/2009/
12/senators-seek-to-put-opm-in-charge-of-health-care-public-option/
30472/); See also, OPM could get role running national health plan,
Government Executive (Dec. 6, 2009) (www.govexec.com/pay-benefits/2009/
12/opm-could-get-role-running-national-health-plan/30473/).
\7\OPM could get role running national health plan, Government
Executive (Dec. 6, 2009) (www.govexec.com/pay-benefits/2009/12/opm-
could-get-role-running-national-health-plan/30473/).
\8\Sabrina Corlette, Action on Multi-State Plans, But Still No
Specifics, CHIR (blog) (July 27, 2012) (www.chirblog.org/
actiononmultistateplans/).
\9\Sarah Goodell, The Multi-State Plan Program (Updated) Health
Policy Brief, Health Affairs (May 29, 2014).
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To imply that the failure of MSPP was related to the
process by which it was included in the final bill is
misleading and disingenuous. By that logic, any changes made to
a bill after the Committee process, any amendment offered on
the Floor of the Senate, or any bill passed without a hearing
would raise similar concerns and should be repealed for lack of
thorough vetting.
The FEHBP is a market-based employer-sponsored health
insurance program that establishes its own rules and
regulations for insurance issuers to participate in the
program, and is not subject to State licensing and insurance
requirements. OPM uses its preemption authority of State
requirements to ``deliver quality health care services to FEHBP
Program members while controlling the costs of premium
increases.''\10\
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\10\Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2019 (Feb. 2018).
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In the debate around implementation of the MSPP, the
paramount concern for consumer advocates and State health
insurance commissioners was whether the authority in Section
1334 meant OPM could preempt State requirements and deem plans
eligible to participate on the exchanges.\11\ In response to
these concerns and comments received during the regulatory
process, the final rule published by OPM required issuers who
chose to participate in the MSPP to comply with State law.\12\
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\11\Sabrina Corlette, Action on Multi-State Plans, But Still No
Specifics, CHIR (blog) (July 27, 2012) (www.chirblog.org/
actiononmultistateplans/); Letter from Consumer Representatives to
Office of Personnel Management (Aug. 21, 2015); Comments from National
Association of Insurance Commissioners to Office of Personnel
Management's request for information regarding Multi-State Plan
Nationwide Insurance Plans (Aug. 10, 2011).
\12\45 CFR Sec. 800.101.
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When the health insurance marketplace exchanges were stood-
up in 2013 for the 2014 plan year, OPM had contracted with one
group of issuers, Blue Cross and Blue Shield, to offer more
than 150 plan options in 31 States and the District of
Columbia. Approximately 350,000 individuals enrolled in a
multi-State plan in 2014. Multi-State plan coverage expanded in
2015 to include 437,000 individuals in 36 States and the
District of Columbia. In plan year 2016, the ability of OPM to
attract more issuers and expand options to more States became a
significant challenge, and only 375,000 individuals in 33
States and the District of Columbia enrolled in plans. This
problem was exacerbated in 2017 where enrollment fell to
290,000 individuals in 22 States, and in plan year 2018, only
55,000 individuals in one State--Arkansas--are covered by the
multi-State plans.\13\
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\13\Office of Personnel Management, Patient Protection and
Affordable Care Act; Establishment of the Multi-State Plan Program for
the Affordable Insurance Exchanges, 80 Fed. Reg. 9649 (Mar. 26, 2015)
(final rule).
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OPM planned to expand insurance options in the MSPP to 44
States in 2016,\14\ and targeted a goal of more than 505,000
individuals to be covered by the multi-State plan options in
2017.\15\ However, these goals were never met as OPM struggled
to attract new issuers, offer more plan options, and cover more
individuals. As the OPM Office of the Inspector General (OIG)
noted in a December 2016 Management Alert,
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\14\Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2016 (Feb. 2015).
\15\Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2017 (Feb. 2016).
``The MSP Program is experiencing a reduction in the
number of options offered by MSP Issuers. We expect
this to continue until the market stabilizes . . .
OPM's National Healthcare Operations is doing the best
that it can to retain and attract MSP issuers and
state-level issuers into the program. However, the
program is voluntary and the Affordable Care Act does
not provide OPM with flexibilities, such as allowing
the MSP Program to establish requirements that are
consistent across all states, that can be used to
attract and incentivize participation in the program.
Legislative changes would be required to allow for such
flexibilities.''\16\
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\16\Memorandum from Norbert Vint, Deputy Inspector General, to Beth
Cobert, Acting Director, Management Alert--Status of the Multi-State
Plan Program (Dec. 8, 2016).
OPM agreed with the OIG Management Alert and noted that it
continues to struggle to attract insurers to participate in the
MSPP. OPM stated in its fiscal year 2018 Congressional Budget
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Justification that,
``[T]he statute does not authorize the preemption of
state law requirements governing health insurance. This
lack of preemption capability is a significant
difference between the [MSP] and the FEHBP. These
statutory changes have been amplified by the volatility
of the individual and small group health insurance
markets, which has caused a number of issuers to cease
offering products on the Health Insurance Exchanges.''
RESOURCES
One concern raised during the consideration of the MSPP was
the impact of the new requirement on the existing insurance
benefit programs at the Office of Personnel Management. In
particular, concerns were raised about the resource allocation
and interplay between the new MSPP and the existing FEHBP.
Section 1334 addressed this issue directly in subsection (g),
which--
prohibited OPM from allocating fewer
financial or personnel resources to the administration
of the FEHBP;
required the MSPP to have a separate risk
pool from the FEHBP;
authorized creation of a separate program
office for the MSPP;
required the Director to separate resources
in the program administration between the MSPP and
FEHBP; and
prohibited any requirement for FEHPB plans
to participate in the MSPP.\17\
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\17\Pub. L. No. 111-148 (2010).
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OPM stood up the MSPP using funds appropriated to the
Department of Health and Human Services (HHS) for Affordable
Care Act implementation.\18\ OPM used the $5 million
transferred from HHS between fiscal years 2011 and 2013 to
carry-out the requirements of the ACA and establish the
MSPP.\19\ Since the Program went into effect, OPM has allocated
resources through its discretionary salaries and expenses
appropriations, while the remainder of OPM's insurance program
funding comes through appropriations limitations of Trust Fund
transfers for administrative expenses.\20\ It is misleading to
suggest diversion of resources from other insurance programs
lead to any unfulfilled mission-requirements.
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\18\Document production from U.S. Off. of Pers. Mgmt. provided to
S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6, 2017) (on file
with S. Comm. on Homeland Sec. & Governmental Aff.).
\19\Document production from U.S. Off. of Pers. Mgmt. provided to
S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6, 2017) (on file
with S. Comm. on Homeland Sec. & Governmental Aff.).
\20\Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2013 (Feb. 2012); Office of Personnel
Management, Congressional Budget Justification Fiscal Year 2014 (Feb.
2013); Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2015 (Feb. 2014); Office of Personnel
Management, Congressional Budget Justification Fiscal Year 2016 (Feb.
2015); Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2017 (Feb. 2016); Office of Personnel
Management, Congressional Budget Justification Fiscal Year 2018 (Mar.
2017); and Office of Personnel Management, Congressional Budget
Justification Fiscal Year 2019 (Feb. 2018).
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In fiscal year 2018, OPM spent $10.3 million to administer
the MSPP.\21\ In the absence of the requirement for OPM to
implement the MSPP, these discretionary funds could be used for
other purposes such as information technology modernization or
administration of other insurance programs. However, given that
the funds are discretionary, elimination of the program could
also mean that the salaries and expenses discretionary funding
is reduced by a corresponding figure in future year
appropriations. There is no guarantee that the repeal of the
requirement for OPM to administer the MSPP will divert
financial resources to other programs, and may require OPM to
attrite personnel resources in the absence of funding for those
personnel.
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\21\Document production from U.S. Off. of Pers. Mgmt. provided to
S. Comm. on Homeland Sec. & Governmental Aff. (Oct. 6, 2017) (on file
with S. Comm. on Homeland Sec. & Governmental Aff.).
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CONCLUSION
The goal of the MSPP was to inject competition and choice
into the health insurance marketplace and as the CBO noted in
2009, this provision did not have a significant effect on
budget estimates because OPM was not granted the kind of
authority it needed to do so.\22\ OPM and the OPM Inspector
General noted in various budget and management documents that
the destabilization of the health insurance marketplace further
led to the lack of efficacy in the MSPP.\23\
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\22\Letter from Douglas W. Elmendorf, Dir., Cong. Budget Off., to
Harry Reid, Majority Leader, U.S. Senate (Dec. 19, 2009), http://
www.cbo.gov/sites/default/files/cbofiles/ftpdocs/108xx/doc10868/12-19-
reid_letter_managers_correction_noted.pdf.
\23\Office of Personnel Management, Agency Financial Report Fiscal
Year 2017 (Nov. 2017); Memorandum from Norbert Vint, Office of
Personnel Management Deputy Inspector General, to Beth Cobert, Acting
Director, Management Alert--Status of the Multi-State Plan Program
(Dec. 8, 2016).
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In the absence of Congress and the Administration
strengthening the Affordable Care Act, it is the view of the
Minority that OPM should not be statutorily obligated to run
this program. Furthermore, given ongoing efforts to destabilize
the health insurance markets, it is the jurisdictions of the
Senate Finance Committee and the Senate Health, Education,
Labor, and Pensions Committee to address issues of healthcare
market competition, choice, and stabilization not the Senate
Homeland Security and Governmental Affairs Committee.
VIII. CHANGES IN EXISTING LAW MADE BY THE BILLS, AS REPORTED
Because S. 2221 would not repeal or amend any provision of
current law, it would make no changes in existing law within
the meaning of clauses (a) and (b) of paragraph 12 of rule XXVI
of the Standing Rules of the Senate.