Creating private non-profit, consumer-governed health insurance plans called Consumer Operated and Oriented Plans (CO-OPs) is part of the U.S. government’s strategy to increase lower-cost health insurance options for its citizens under the Affordable Care Act.
Today, the Centers for Medicare & Medicare Services (CMS) published proposed standards for these CO-OPs, and for qualifying for the $3.8 billion in repayable loans the government is offering to help start-up and capitalize these new health plans.
According to actuarial and consulting firm Milliman Inc., hospitals and physician groups are the most likely entities to create CO-Ops because one of the criteria for government approval is the use of an integrated care model, which is easier for health care providers to achieve.
As the recent purchase of West Penn Allegheny Health System by insurer Highmark Inc. shows, there is a trend toward blurring the line between health care providers and payors in the name of holding down costs. CO-Ops created by health care delivery systems and Accountable Care Organizations (ACOs) could accelerate that trend.
CO-OPs will sell individual coverage through the State’s Affordable Insurance Exchange and may also sell coverage to small businesses through the State’s Small Business Health Option Programs (SHOP Exchanges). CMS’s goal is the creation of CO-OPs in all 50 states.
CMS is taking public comment on the proposal until September 16, 2011, and plans to release a Funding Opportunity Announcement soon with additional details on the loans to help start up CO-Ops.