Both reform problems and fixes could destroy CO-OPs

Healthcare reform created consumer-oriented and operated health plans (CO-OPs) to provide alternatives to traditional insurance, but serving that purpose is getting harder given problems with and the proposed reinstatement of canceled plans, according to Reuters. So what was meant to be a strategic ally in President Barack Obama's reform agenda may be turning into a neglected step-child.

Though the White House told Reuters that "the Administration has ongoing outreach to many [healthcare reform] stakeholders, including CO-OPs," CO-OP representatives were excluded from Obama's recent meeting with insurance leaders to discuss how to let Americans keep canceled plans.

And allowing people to keep present plans may remove CO-OPs from the mix by limiting Americans' ability to comparison shop for insurance.

CO-OP representatives wrote to the White House on Monday, asking the administration to remember how reform tweaks affect their operations, Reuters noted. For example, they're concerned about  large payers receiving double perks: If large payers take healthy Americans from the exchanges, and then the government pays them extra for enrolling sicker people, large insurers benefit twice. CO-OPs receive no comparable advantages.

"Incumbent carriers are going to be able to keep in their other back pocket this good business that they've already signed up for these non-compliant plans," John Morrison, president of the National Alliance of State Health CO-OPs, told Reuters. "CO-OPs on the other hand do not have any preexisting business or a good book of business in their back pocket, and their entire underwriting results are going to be based on new business," he explained.

Utah CO-OP Arches Health Plan expects its enrollment to slip when insurers reinstate canceled individual market plans. "Arches, as a start-up health plan, will probably lose some customers," Shaun Greene, chief operating officer of Arches Health Plan, told FierceHealthPayer in a recent interview. "But until we get stable we need to make temporary allowances like this and others, such as allowing insurers to enroll people directly so people can get coverage."

For more:
- read the Reuters article