ObamaCare Clusterfuck: Insurance companies wrote ObamaCare to try to freeze out co-ops (without complete success)
Who would have thought.... Anyhow, USA Today:
Consumer-run health insurance cooperatives, which were included in the Affordable Care Act to stimulate competition and lower prices, have been stymied by the insurance industry and a lack of publicity, industry and health care experts say.
The consumer-operated and run insurance companies, called co-ops, are often funded by government loans. Cooperatives can sell their policies through the state and federal health insurance exchanges where Americans can buy coverage.
The co-ops have been created by consumer groups, doctors, membership associations — such as for small businesses — and other non-profit organizations with the idea that they will vote on a board made up of the co-op's enrollees in the first year.
Non-profits are bad because the market.
Consumers may have not heard much about co-ops as an option, because opposition from the insurance industry forced the government to offer loans instead of grants to the co-ops, and to forbid co-ops from using any loan money to market their businesses.
"Co-ops should not be permitted to avoid market standards and requirements applicable to other issuers of (qualified health plans)," wrote AHIP executive vice president Daniel Durham in a letter to the Centers for Medicare and Medicaid Services. "Establishing a different set of standards for co-ops in the exchange not only offends the guarantee issue requirements for an exchange, but creates an unfair advantage for co-op plans that poses a distinct threat of adverse risk selection and will threaten the willingness of other QHPs to participate in the exchange market."
Why? Why not just promote co-ops as a matter of public policy? (Plank #10 in the 12-Plank Platform, I might add.*)
Despite the obstacles facing cooperatives, the National Alliance of State Co-ops says their plans are gaining acceptance in more state markets. Co-ops have expanded into other states, such as Minuteman Health of Massachusetts, which will offer plans in New Hampshire, and the Kentucky Health Cooperative, which will go into West Virginia. The Montana Health CO-OP is planning to go into Idaho, too. And, after expecting 12,000 members in its first year, CoOportunity Health, which operates in Iowa and Nebraska, reported that 35,000 people have enrolled and they fall evenly in all age brackets, according to the alliance.
A report in November by the consulting firm McKinsey and Company found 37% of the lowest-priced plans in states with co-ops in their exchanges were offered by co-ops.
Which says nothing about actual coverage, co-pays, deductibles, narrow networks, or balance billing. (Did I get them all?) Nevertheless, you'd expect a co-op with no fancy-schmancy administratrative layer to deliver a bigger bang for the buck, all other things being equal.
Co-ops must depend on conducting "consumer education" programs to make up for their lack of marketing, said Janie Miller, CEO of the Kentucky Health Cooperative and a former Kentucky insurance commissioner.
"A part of the mission of the co-op has been a fairly heavy grass-roots effort," she said.
As the exchanges launched, including Kentucky's state-based exchange, co-op members spoke to any organization that wanted to hear more about the Affordable Care Act. They explained benefit design, pricing and the definition of a co-op.
When Kentucky's health care exchange started to succeed, so did the state co-op, Miller said.
Nationwide, there are 23 co-ops, including two in Kentucky. In 2014, Miller said her co-op would convert its board to a partially elected consumer board, and then a fully elected consumer board in 2016. Kentucky received federal loans, but Miller said they went after private loans for their marketing campaign.
KY has been heralded as a success. I wonder if its disproportionately high number of co-ops is part of that?
"When we compare the funding we had against the funding the major insurers had, we were surprised at how well we did with sort of our hands tied," she said. "I think a lot of people who appreciated we were out there to help people the previous markets weren't helping."
If you accept the market....
NOTE * Yes, under single payer health insurance co-ops wouldn't exist. But think of that in terms of multiple lines of defense for a more humane political economy.