[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:
---------------------------------------------------------------------------
    \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.).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.