At least 10 organizers of “CO-OP” plans have received some or all of the state regulator approvals they need to open the plans for business.
CO-OP organizers have received state permission to go into business in some states that have been hostile toward the Patient Protection and Affordable Care Act (PPACA) exchange program as well as some states that have welcomed the program.
John Morrison, president of the National Alliance of State Health CO-OPs (NASHCO), said in a statement that he is hoping good results in the 24 states with funded CO-OPs will help the CO-OP concept spread to the rest of the country.
“Member-governed, nonprofit CO-OPs will drive down health insurance costs by adding competition and accountability to the marketplace,” Morrison, a former Montana insurance commissioner, said.
Congression included the provision that created the Consumer Operated and Oriented Plan (CO-OP) program in an effort to address concerns that a single carrier controls 50 percent or more of the commercial health insurance market in some states, and that two carriers dominate the market in many other states.
CO-OPs are supposed to serve individuals, small groups, or both individuals and small groups, and they also can sell some coverage to large groups. They cannot have any ties to commercial or traditional nonprofit health insurers. The new PPACA exchanges, or health insurance supermarkets, are supposed to offer consumers access to CO-OP coverage options.
PPACA originally provided $3.4 billion in federal CO-OP startup funding, or enough for the U.S. Department of Health and Human Services (HHS) to finance the creation of a CO-OP carrier in every state. HHS approved 24 loan applications and had many more in the pipeline. In January, Congress and the Obama administration infuriated the CO-OP organizers with applications still in the HHS pipeline by suddenly eliminating any additional funding for any CO-OPs that had not already received loan commitments.
Although the funding cut has hurt CO-OP organizers in some states, the organizers with funding continue to move ahead, NASHCO officials said.
Montana got the ball rolling by licensing Montana Health CO-OP in December 2012. That CO-OP is now offering a series of webinars for providers who might be interested in joining its network.
Other CO-OPs with some level of regulatory approval include HealthyCT, in Connecticut; CoOportunity Health, Iowa and Nebraska; the Kentucky Health Cooperative; Maine Community Health Options; Evergreen Health Cooperative, in Maryland; New Mexico Health Connections; Oregon’s Health CO-OP; Arches Health Plan, in Utah; and Common Ground Healthcare Cooperative, in Wisconsin.
CO-OPs may be gaining potential champions as well as vendors by negotiating vendor relationships.
Kentucky Health Cooperative, for example, announced it will be using ProCare Rx, a national pharmacy benefit manager (PBM), to run its pharmacy benefits program.
The CO-OPs also are courting brokers. Dennis Litos of Consumers Mutual Insurance of Michigan gave a presentation on why brokers should bring their customers to a CO-OP for the Western Michigan Area Health Underwriters in February.
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