Innovative Strategies to Help Affordable Consumer Operated and Oriented Plans (CO-OPs) Compete in New Insurance Marketplaces

April 13, 2012 | Volume 8

Authors: Terry Gardiner, Roger Neece, and Michael Mendelevitz
Contact: Terry Gardiner, Vice President of Policy and Strategy, Small Business Majority, tgardiner@smallbusinessmajority.org
Editor: Naomi Freundlich

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Overview

The Affordable Care Act paves the way for groups to develop innovative, affordable health insurance and care options known as Consumer Operated and Oriented Plans (CO-OPs). These CO-OPs will be nonprofit, consumer-controlled entities that are designed to serve individuals and small businesses, especially in noncompetitive markets. The CO-OP provision was included in the Affordable Care Act to address the lack of affordable health plan alternatives in many state and regional markets and to counter a trend toward market concentration. Despite their promise, CO-OPs face a number of business challenges that go beyond typical start-up hurdles. This issue brief lays out a number of innovative strategies CO-OP organizers are developing to increase the odds of long-term sustainability and economic success. These strategies—aimed at building market share, creating integrated provider networks, and achieving cost savings through payment reform—could establish CO-OPs as a viable new entrant in the health care field.

Citation

T. Gardiner, R. Neece, and M. Mendelevitz, Innovative Strategies to Help Affordable Consumer Operated and Oriented Plans (CO-OPs) Compete in New Insurance Marketplaces, The Commonwealth Fund, April 2012.