Revolutionary health insurance marketplaces offer new health CO-OPs for many Americans

Recent stories about the marketplaces have focused on how existing insurers will adjust to this new landscape. But a key revolutionary feature, the health insurance CO-OP, has flown largely under the radar. Now, CO-OPs are about to surface in at least 22 states and they boldly pledge to change the health coverage game by putting consumers in charge.

Consumer Operated and Oriented Plans (CO-OPs) are funded by low-interest government loans. The loans were awarded last year and 22 CO-OPs are now licensed to sell insurance in as many states across the country. The launch of these CO-OPs is historic; never before have so many similar companies in so many states simultaneously entered the market. These private, non-profit CO-OPs will be member-governed and their leadership includes doctors, former state insurance commissioners, ex-health insurance executives, retired state legislators, labor leaders, small business owners, and health care activists, among others. They are united by one common desire: to change the status quo and fix America’s broken health care system.

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When Congress created CO-OPs, Sen. Max Baucus (D-Mont.) predicted CO-OPs would be “tough enough to keep insurance companies’ feet to the fire” and in turn drive positive, consumer oriented change through competition.  CO-OPs will sell all four plans (Bronze, Silver, Gold and Platinum) on the marketplaces, and will offer coverage outside the marketplaces as well. Nearly 200,000 health care providers have already agreed to provide medical care to CO-OP members at affordable rates.

Some people continue to play political football with health care reform. But most Americans simply want a competitive market where they can choose affordable coverage that provides access to quality health care.  The new marketplaces and Health CO-OPs dovetail to give American consumers what they want. Maine Community Health Options (MCHO), for example, is one of only two insurers to offer plans on Maine’s new health insurance marketplace. Without this CO-OP, Mainers would only have one option and zero competition. And recent reports show that MCHO will offer the lowest premium rates in virtually all categories across all areas of the state.

Maine is not an outlier. While information about premiums is still trickling in, the early data is positive. From state to state, CO-OPs are offering some of the lowest prices for quality coverage, providing an affordable alternative to existing insurers, while also pressuring other companies to keep their rates down.

CO-OPs are changing the game because they are different from existing insurance companies. They are not interested in profits. They want their members to have the best health care—and the best health—for the lowest cost.

Further, they are designing these member governed, non-profit companies on blank slates, incorporating only the very best ideas. They have no old systems or territories to defend; “the way we’ve always done things” is not in their vocabulary.

Chief among the CO-OP strategies is a focus on primary care and prevention, using electronic data and payment incentives to doctors, to keep patients healthy. Many CO-OPs are also utilizing the medical home concept to better coordinate and improve lifelong care for members while reducing wasteful, unnecessary, and sometimes harmful procedures. Put simply, CO-OPs aim to put the “health” back in health care.

Of course, challenges remain for the CO-OPs. They are competing against established insurers with deep pockets. But in a few days, when the marketplaces come to life and consumers step forward, health insurance CO-OPs will be there in 22 states to offer Americans a new choice; a member oriented, non-profit, and innovative choice. Those who have longed for changes in our health care system have reason to be excited.

Morrison, a former Montana insurance commissioner, is president of the National Alliance of State Health CO-OPs. All licensed CO-OPs are members of NASHCO.