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July 28, 2015 at 11:22 AM
The Patient Protection and Affordable Care Act of 2010 (PPACA) has caused a lot of disruption and aggravation even for health insurance agents and brokers who generally support the goals of PPACA.
And, clearly, many PPACA implementers have gone way, way out of their way to create an attitude of “Trip and fall!” in the hearts of licensed producers. Many PPACA implementers have minimized the role producers play in advising consumers, done what they could do to help insurers slash producer compensation, and tried to replace producers with many different types of non-producer exchange plan helpers. (Who have, in turn, gone on to complain about unrealistic performance goals and compensation arrangements for non-producer exchange plan helpers…)
So, of course, many producers will jeer when they hear about organizers of the new nonprofit, member-owned Consumer Operated and Oriented Plan (CO-OP) health insurers failing.
Sen. Max Baucus and other moderate Democrats put the CO-OP program in PPACA in an effort to increase competition in the health insurance market, and also to try to reduce pressure from some very liberal Democrats to set up a completely government run single-payer system, or to at least every American access to a government-run, Medicare-like “public option” health plan.
See also: Baucus Puts Bill In Play
But the very liberal Democrats ended up putting in strange constraints. CO-OP organizers can’t have ties to any established health insurers, including the nonprofit, member-owned mutual insurers established before the PPACA CO-OPs came to life. CO-OP organizers and members cannot sell the CO-OPs.
Organizers of PPACA CO-OPs could and did get startup loans from the U.S. Department of Health and Human Services (HHS), but, because they cannot sell the CO-OPs, the CO-OPs themselves have no value as assets.
In theory, the restrictions were supposed to keep the meanies at the traditional insurance companies from infecting the CO-OP managers with their evil bean-counting ways.
