It’s time to bury ZombieCare once and for all

“The closest thing to eternal life on Earth, quipped President Reagan, “is a government  program.”

Reagan, however, did not anticipate the emergence of the bureaucratic equivalent of the “living dead”: the Multistate Plan Program (MSP), a special set of federally sponsored health insurance plans administered by the U.S. Office of Personnel Management (OPM). It is not surprising then that Sen. Ron Johnson (R-Wis.) and 15 of his Senate colleagues are sponsoring legislation (S. 2019) to address this strange phenomenon.

In 2010, the MSP was hurriedly drafted and enacted as a promising “substitute” for the failed “robust public option” embodied in the House version of ObamaCare. The program’s special plans were designed to compete against all other private health plans in ObamaCare’s nationwide system of health insurance exchanges.

Except they don’t.

Though the MSP program is on the books, the MSP plans no longer even exist. In short, this ObamaCare program is no longer “alive” in any meaningful sense of the word. Call it ZombieCare.

Though it has largely escaped media notice, the Multistate Plan Program is one of ObamaCare’s most dramatic health policy failures. In 2014, Obama administration officials expected that two-statutorily required national insurers would participate in the program, but only one showed up. Though anticipating a robust first-year enrollment of 750,000 persons, total program enrollment not only fell short of the initial goal but never even came close. By 2016, the program had enrolled just 440,00 persons, or just 4 percent of the nation’s entire health insurance exchange enrollment.  

By law, the MSP program was to have plans competing in all 50 states by 2017, but only 22 states were able to field MSP plans. By 2018, only one state (Arkansas) offered MSP coverage, and total program enrollment fell to just 55,000 souls. In 2019, therefore, OPM announced that it was suspending MSP operations because the program could not meet the basic statutory requirements of the law.

OPM supported the program’s repeal, noting that the agency’s time, energy and effort would best be concentrated on its primary mission: administering pay and benefits for 4.7 million federal employees and retirees and their dependents, including the popular and successful Federal Employees Health Benefits Program (FEHBP), a consumer-driven system of competing private health plans.

The MSP program failed primarily because it was unable to attract consumers. Though Senate liberals provided the OPM director broad discretionary authority in the administration of the program, plus certain statutory advantages denied to other health plans competing in the ObamaCare exchanges, it was not enough.  

Writing in the journal Health Affairs, OPM officials noted that, among other things, the law’s “level playing field” requirement – equal treatment of MSP plans and all other plans in the states’ markets – was a serious obstacle to the program’s success.

The left has taken that big lesson to heart. If one examines the major liberal legislative proposals for a “public option” (a government plan to compete against private health plans) one is struck by the meticulously detailed provisions to ensure that the government plan would enjoy special regulatory or statutory advantages over private health plans. In short, they would legislate unfair competition between the government and private sector plans, deliberately rig the markets and thus progressively reduce private health coverage.

Meanwhile, several health provisions in President Biden’s proposed multi-trillion-dollar spending bill would further expand government control over health coverage, and thus further crowd out superior, private employer-sponsored coverage for individuals and families.     

Congress should not only refrain from creating new government plans or programs designed to erode Americans’ private health care and coverage. It should also wipe the statute books clean of outdated federal experiments that have proven to be epic failures.  

Often at odds with official Washington, President Reagan campaigned against the seeming immortality of costly, duplicative and wasteful government programs. Today, rather than permitting the MSP program to live zombie-like on the statute books, Congress should at least give it a decent burial.   

Robert E. Moffit is a senior fellow in domestic policy studies at The Heritage Foundation.