Kickstarting CO-OPs to Provide New Health Coverage Options

eAlert 48330915-3906-4fae-aa07-3d3ae3f8c0b8

<p>To address the lack of affordable health care coverage alternatives in many state and regional markets, the Affordable Care Act includes provisions that facilitate the development of nonprofit, member-run insurance companies known as Consumer Operated and Oriented Plans (CO-OPs). Under the law, CO-OPs must operate with a strong consumer focus, and profits must be used to further their mission through lower premiums, improved benefits, or improved quality of care. A <a href="/publications/issue-briefs/2012/apr/innovative-strategies-help-affordable-consumer-operated-and">new Commonwealth Fund issue brief </a>examines strategies that CO-OP organizers can use to build sufficient market share, create integrated provider networks, and achieve cost savings through provider payment reform.</p><p>The new CO-OPs have the potential to provide individuals and small businesses with innovative new coverage options, especially in markets with little or no competition. So far, the Department of Health and Human Services has awarded eight organizations initial start-up funding, and several others are in formation, according to authors Terry Gardiner, Roger Neece, and Michael Mendelevitz. Nascent CO-OPs include those organized by cooperative and small-business organizations, nonprofit groups providing services to freelance workers, and community organizations. </p>
<p>To succeed and grow, CO-OPs will need to be financially stable as well as able to recruit experienced management and obtain funding for growth and expansion. Above all, the new plans must offer consumers and employers an alternative that achieves good patient outcomes at affordable costs. </p>
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