One of the key mechanisms for expanding health insurance coverage under the Affordable Care Act is the creation of new insurance exchanges—marketplaces where people can compare and purchase qualified private health plans based on benefits, quality, and price. Although one goal is to stimulate competition among private health plans, in most states the insurance markets for individuals and small businesses are highly concentrated. For example, in 30 states a single insurance company accounts for more than half the enrollees in the individual market, and in most states one or two insurers dominate the small-group market.
To spur competition among plans, the Affordable Care Act also created the Multi-State Plan Program. The Office of Personnel Management (OPM), which administers health insurance programs for federal employees and members of Congress, will certify and oversee health insurance issuers to offer at least two plans in every state exchange.
This Health Policy Brief explores the challenges facing the Multi-State Plan and the issues associated with offering health insurance plans in multiple states, and was published online on April 3, 2013 in Health Affairs.
Researchers at the Georgetown University Health Policy Institute analyzed legislation to sell private insurance across state lines enacted in six states—Georgia, Kentucky, Maine, Rhode Island, Washington, and Wyoming—and find that proposals to authorize selling health insurance across states lines do not adequately take into account the complexity of how insurance products are sold and regulated.