When health insurance exchanges open for enrollment this October, well-established insurers will be competing alongside startup companies. For the first time, consumer-owned and operated health plans (CO-OP) have a chance to compete side by side with big name insurers like Aetna, Cigna, WellPoint and UnitedHealth, according to an article from Kaiser Health News/Washington Post.
The situation is akin to a mall's food court. "There's McDonalds, Burger King, KFC, but also--with the same space and signage--there's a Bob's Sandwich Shop and a local ice cream store," says David Lyons, CEO of CoOportunity Health, a CO-OP in Iowa and Nebraska.
CO-OPs aren't beholden to shareholders, so they can freely build the company from the ground up while engaging members and realigning provider reimbursements. Plus, they're working to keep members' costs low. For example, monthly premiums in Oregon for a single nonsmoking 40-year-old will range from $234 to $251 for the state's two CO-OP insurers, compared to $169 to $422 a month for comparable plans from other insurers.
The 24 CO-OPs operating around the country are taking steps to carve out distinct spots in the exchanges. Tennessee and South Carolina CO-OPs will pay doctors more money for keeping their patients healthy. "We'll pay for good medicine, not bad medicine," said Jerry Burgess, who heads both the Community Health Alliance in Tennessee and Consumers' Choice Health Insurance in South Carolina. "We're small and flexible; we don't need to move a million people in a new direction."
And Maryland's CO-OP, Evergreen Health Cooperative, will let its members receive care from medical homes that include salaried physicians who will treat a limited number of patients. an being, not a number."
But CO-OPs also have faced some uncertainties. The Vermont Health CO-OP, for example, was denied a license to sell insurance in the state, primarily because of financial solvency and corporate governance issues. And all CO-OPs lost a major source of their funding when the fiscal cliff agreement eliminated almost $2 billion in loans for the new insurers, FierceHealthPayer previously reported.
To learn more:
- read the KHN/Washington Post article