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New Health Insurance CO-OPs Face Challenges

Posted in Affordable Care Act, Legislation and Public Policy, Private Insurers, State Matters

Reuters reported that the 23 Consumer Operated and Oriented Plans (CO-OPs) created under the Affordable Care Act (ACA) were not invited to the November 15th meeting between President Obama and insurance company executives to discuss the extension of insurance policies that don’t comply with the ACA. Some CO-OP representatives expressed concern that the White House might be giving short shrift to their business concerns.

CO-OPs are nonprofit health insurers that were formed to compete with larger insurers in offering health plans through the new state exchanges, or “marketplaces,” as well as the troubled federal website. Participants in the CO-OP program received nearly $2 billion in startup loans from the Centers for Medicare & Medicaid Services, but an additional $1.4 billion was eliminated in last January’s “fiscal cliff” negotiations.

CO-OP leaders are concerned that’s continuing technical problems might cause many consumers to purchase insurance directly from their larger competitors outside the exchanges. That potential loss of expected business (particularly from relatively healthy new enrollees), coupled with the loan cuts, could jeopardize some CO-OPs’ chances of surviving the startup period.

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