Co-op plans were established by the Patient Protection and Affordable Care Act to foster greater competition in insurance and encourage local, consumer-friendly options. Health policy experts are closely watching the rollout of the 24 new cooperatives in more than 20 states. Those plans received nearly $2 billion in federal loans to cover startup costs and to meet state solvency requirements. The new plans are being formed by public health activists, medical associations, business groups, hospital executives, labor unions and others. The hope is the co-op plans will help reduce premiums and improve healthcare quality and customer service. In many states, only one or two insurers control the bulk of the health insurance business.
Congress eliminated $1.4 billion of the $3.4 billion remaining for Consumer Operated and Oriented Plans under the reform law as part the fiscal cliff deal reached at the beginning of 2013. The original allocation was $6 billion. At least 26 proposals for CO-OP funding were pending at the time Congress cut the funding this year. Republicans urged cutting the money because they didn't want the government subsidizing co-op plans to compete with commercial insurers.
In an interview, David Lyons, CEO of Iowa's not-for-profit CoOportunity Health, said no commercial insurer in Iowa has established a similar relationship with the statewide group of providers in the alliance. “It's designing the policies and payment policies to tighten the relationship between consumers and their providers, versus health insurers interjecting themselves in between those two partners,” he said.
The co-op's new plans will use either an open-access, tiered-benefit design or a select-network plan that uses only Alliance providers.
None of the 23 other new co-operative plans around the country have reached a similar arrangement with providers. The other co-op plans' lack of a statewide provider focus may stem from their original focus on specific patient populations or certain types of providers, such as community health centers, Lyons said.
The Iowa cooperative is revising upward its earlier enrollment projection of 50,000 people within three years following the recent decision of Wellmark Blue Cross and Blue Shield—one of Iowa's largest insurers—not to participate in the exchange in 2014.
Dan Kueter, executive director of University of Iowa Health Alliance, said some elements of the co-op plan arrangement in Iowa may be replicable in other states, such as its encouragement of closer collaboration between providers and between providers and insurers.
Kueter said the co-op plan was interested in working with his alliance because the affiliated providers have built a genuine clinical collaboration with the promise of delivering better continuity of care with lower costs. “Their interest in working with us is validation that we're on to something,” he said.
Follow Rich Daly on Twitter: @MHrdaly
