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Co-op health insurance plans: Great hope of Affordable Care Act

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President Obama and his Democratic allies long ago gave up the hope of a "public option" as part of the Affordable Care Act. It just wouldn't fly politically.

An alternative "Hail Mary" was introduced and made part of the law.

It was an idea largely suggested by Senator Kent Conrad (D-ND) based on his experience with rural cooperatives. Congress then further hobbled the cooperatives by converting the ACA’s cooperative start-up grants to loans, preventing the cooperatives from using the federal funds for marketing, limiting them from selling insurance to large employers, and prohibiting them from banding together to negotiate joint contracts with doctors.

While it is no "public option," it is show flashes of success.

Kaiser Health News reports that there are now "23 new health insurance companies that started under the Affordable Care Act. They're all nonprofit, member-owned cooperatives."

Member-owned cooperatives?

With not-so-household names like CoOportunity Health (Iowa), Montana Health Co-Op, Nevada Health Co-Op or even the Health Republic Insurance of New York? You have surely heard of mega-health insurance companies such as Blue Cross, Aetna, United Healthcare, Wellpoint and many other household names.

Have you ever heard of "Co-op health insurance?" holds’ names, be rest assured that the "mega-health insurance companies" are aware of them.

Co-ops have a financial cushion of about $100 million in federal startup loans. That gives them several years to readjust prices to cover all the health care their members will need.

There has been some modest success.

Montana's co-op has managed to win about 40 percent of the new exchange market in that state. Co-ops have 50 percent of the new market in Nebraska and Iowa, and 60 percent in Kentucky, says NPR.

Co-ops were established from another little-known provision of the Affordable Care Act (ACA), which provides for the establishment of "cooperatives," and that provision of the law is titled "Federal program to assist establishment and operation of nonprofit, member-run health insurance issuers."

In English, that is a provision of the ACA that was posited at the time as an alternative to both publicly funded health care and single-payer health care. It was meant to be part of the health care reform debate by the Obama administration as a possible compromise with Blue Dog Democrats, as well some Republicans in the search for universal health care.

The health insurance co-op is not strictly run by the government, but does receive its initial seed money from the government. Senator Max Baucus of Montana, who was the chairman of the United States Senate Committee on Finance, at the time of the debate about the Affordable Care Act, called these proposals "tough enough to keep insurance companies' feet to the fire."

Some would not agree.

Time will tell.

The National Alliance of State Health CO-OPs (NASHCO) membership is comprised of the 23 health insurance CO-OPs that are seeking to provide a new form of high quality, low cost, and member governed health insurance in their respective states.

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Sources:

Wikipedia - Health insurance cooperative

Kaiser Health News - Co-op Health Insurance Plans See Early Success

CMS.gov - Co-op

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Send John Presta an email and your story ideas or suggestions,johnpresta@att.net.

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