The U.S. Department of Health and Human Services (HHS) is moving ahead with efforts to set up the Consumer Operated and Oriented Plan (CO-OP) Program — an effort to create a new breed of nonprofit, member-owned health plans.
HHS is preparing to publish a final CO-OP rule in the Federal Register Dec. 13.
Members of Congress put the CO-OP program provision in the Patient Protection and Affordable Care Act of 2010 (PPACA) to create a compromise between Democrats who wanted PPACA to create a government-run “public option” and Democrats who wanted PPACA to preserve the current commercial health insurance market as much as possible.
A CO-OP could serve both individuals and small groups, and it could get some revenue from selling coverage to large groups. A CO-OP could operate in a whole state or in part of a state, or it could operate in multiple states. A CO-OP would be licensed as an insurer in each state in which it operates.
The CO-OP section of PPACA, PPACA Section 1322, calls for HHS to make $3.8 billion in CO-OP startup loans available to would-be CO-OP organizers.
The first round of CO-OP loanapplications was due in October.
“We anticipate making awards in January 2012,” HHS officials say. “We are pleased with the large number of CO-OP loan applications and encouraged by the strong response.”
PPACA Section 1322 states that the new CO-OPs may not be owned by the for-profit or nonprofit health insurers that existed before PPACA was enacted.
If PPACA takes effect on schedule and works as drafters expect, new health insurance exchanges are supposed to begin helping individuals and small business shop for health coverage starting in 2014. CO-OPs are supposed to help increase the range of options available through the exchanges by selling their coverage through the exchanges.