When the Affordable Care Act was passed in 2010, it called for the establishment of Consumer Oriented and Operated Plans (co-ops), which were meant to boost competition and offer competitive health plans for individuals and small groups.
Though industry professionals and consumers were initially hesitant regarding these new market entrants, the 24 health co-ops currently operating in the US are responsible for about 300,000 enrollments and a third of the lowest-premium plans offered on the state and public exchanges.
In Maine alone, Maine Community Health Options has claimed roughly 80% of the state’s market share—exceeding the expectations of analysts and even the co-op’s CEO, Kevin Lewis.
“We’re doing well,” Lewis told Bloomberg, stressing that taxpayers face “no risk whatsoever” that Main Community will go under.
“A lot of those early, dire concerns just need to be re-examined,” he said.
While the degree of the co-ops’ successes vary by state, many are claiming similarly high portions of the market share. However, many agents are still wary of the co-ops, fearing they may not be able to offer the low rates long-term.
In Nevada, agency owner Larry Harrison has sold a few plans from the state’s co-op, Nevada Health Cooperative. However, he stresses that there are many considerations more important than low premiums.
“I’ve never been someone who just chases premiums,” Harrison said. “There are so many facets of a health insurance plan. It’s about reciprocity across state lines, it’s about the network and it’s about rate increases that could be suspect going forward.”
Harrison indicated he is waiting a few years to see if Nevada Health Cooperative can continue offering low rates and a wide network following healthcare reform’s first open enrollment season.
“I want to make sure that the network stays strong and rate increases don’t become suspect, and that they’re doing all the things they say they’re going to be doing,” Harrison said. “It’s too early to tell whether [the co-op] is successful because it’s only been a few months.”
In Illinois, however, co-op Land of Lincoln Health said that—at least where they are concerned—co-ops have done all they can to establish a business model that will still be profitable many years from now.
“Profit is not the sole motivator for us,” said Jason Montrie, vice president of channel and network development for LLH. “We have deep connection to the community, and to the producer community. Our health plan is easy to understand, easy to choose and easy to use.”
If co-ops continue to grow, the Obama administration has promised to support them, particularly in their expansion to other states.
“While it’s still early, we are encouraged by what we have seen so far, and we will continue to work closely with these co-ops to monitor their progress and assess their performance,” said CMS spokesman Aaron Albright.
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