Short Takes On News & Events

Co-Ops Report Early Enrollment Successes And Expansion Plans

By Jay Hancock

February 27th, 2014, 5:00 AM

The Affordable Care Act’s nonprofit co-op health plans, which see themselves as the rebel alliance battling established insurers, have signed close to 300,000 members and are set to expand into three new states next year, officials say.

Photo by Aaron Sumner via Flickr

Starting from zero in October, New York’s Health Republic Insurance has enrolled more than 50,000 policyholders, said John Morrison, who just stepped down as founding president of the National Alliance of State Health CO-OPs. That’s among the best results so far for 23 nonprofits created by the health law. CoOportunity Health in Iowa and Nebraska has also signed up more than 50,000; Colorado HealthOP, close to 9,000.

Co-op bosses were in Washington for a NASHCO meeting this week and talked to reporters afterward.

Created by the health law to increase insurance competition and innovation, co-ops face big challenges as they try to build businesses from scratch while expanding access to care and embracing the chronically ill. The law prohibits them from using their federal startup loans to advertise. Not all of them recovered as well as CoOportunity Health from online problems that initially frustrated shoppers.

But co-ops present snapshots of progress while emphasizing their community ties and scrappy marketing against giants such as Blue Cross plans, UnitedHealthcare and Humana.

Competing against Anthem BlueCross BlueShield (owned by WellPoint), Maine Community Health Options locked up 80 percent of the market in that state for plans offered through an online exchange to individuals and small businesses, said CEO Kevin Lewis. Kentucky Health Cooperative fought Humana and Anthem to win 61 percent of the business in that state, said CEO Janie Miller.

And that was on Louisville-based Humana’s (revenue of $41 billion last year) home turf, she pointed out.

“They have a few more employees than I do,” Miller said. “We believe we’re the health insurance plan of the people.”

In many cases co-ops are selling high-benefit platinum plans rather than the less-expensive bronze or silver policies expected to win almost all the business — even to younger consumers, officials said.

“Everybody said, ‘Oh, we’ll have these … bronze plans and everybody will take the cheapest plan,’” said David Lyons, CEO of Iowa and Nebraska’s CoOportunity Health. “We have more people enrolling in our platinum plans than we do in bronze.”

So far co-ops have won between 15 and 20 percent of the total signups in the their 23 states, Morrison estimated. Open enrollment for 2014 ends March 31.

By adding competition and lowering prices, the community-run cooperatives will save billions for the consumers and taxpayers paying for insurance, Morrison said. Premiums in states with co-ops are 8.5 percent lower on average than in states without them, he said. While that relationship doesn’t prove cause and effect, “nobody’s offered another explanation for why that might be true,” he said.

Three co-ops are jumping borders. Montana Health CO-OP is setting up business in Idaho. Minuteman Health in Massachusetts is moving into New Hampshire. Kentucky Health Cooperative will start selling in West Virginia.

Even though the 2013 fiscal cliff budget deal eliminated funds to put co-ops in most remaining states, enough money remains to finance next year’s additions, officials said.

Membership alone doesn’t ensure co-ops’ success. Next they have to control medical costs to ensure their prices stay competitive.

“Like I said, interesting but thin data,” CoOportunity Health’s Lyons said of the sign-up results. “Give us another year and we’ll be able to figure out what all this means.”

Meanwhile, now that they have payrolls and claims to pay, co-ops show signs of shedding some of their dissident, outsider status.

Karen Ignagni, who as the health insurance industry’s top lobbyist raised concerns five years ago about their creation, accepted NASHCO’s invitation to speak at the group’s meeting this week. Some co-ops have even joined Ignagni’s group, America’s Health Insurance Plans.

5 Responses to “Co-Ops Report Early Enrollment Successes And Expansion Plans”

  1. Bryan says:

    Too many successes. Too many people enrolling and getting to see a doctor regularly for the first time in their lives. For sure, Republicans aren’t going to like this! The Republican motto? Let them eat cake!

  2. Nancy says:

    Not going so well for the consumer and 2 billion spent

    Have you read U.S. House of Representatives
    Committee on Oversight and Government Reform
    Darrell Issa (CA-49), Chairman

    Examining the Administration’s $2 billion ObamaCare Loan Guarantee Gamble: Two Case Studies of Political Influence Peddling and Millions of Taxpayer Dollars Wasted
    Staff Report
    U.S. House of Representatives
    113th Congress
    February 5, 2014

  3. Randy says:

    Darrell Issa? Does anyone really take Darrell Issa seriously? Moron!

  4. Killroy71 says:

    Premiums are lower in states with co-ops? Has anyone correlated that to states that already have lower health care costs for myriad reasons? Oregon has 2 or 3 co-ops, and our costs are lower on average.

    Just wait will all those platinum plan folks decide to get their money’s worth – the “people’s” health insurers will be in the red, and need MORE of “the people’s” money to be solvent.

  5. Rando says:

    The above post proves that there are still a few delusional folks in society that have a constant fear that the sky is falling. Anti-government gun-toting rural sociopathic hayseeds.