The Affordable Care Act鈥檚 nonprofit co-op聽health plans, which see themselves as the rebel alliance battling established insurers, have signed close to 300,000 members and are set to expand into three new states next year, officials say.
Photo by Aaron Sumner via Flickr
Starting from zero in October, New York鈥檚聽Health Republic Insurance has enrolled more than 50,000 policyholders, said John Morrison, who just stepped down as founding president of the聽National Alliance of State Health CO-OPs.聽That鈥檚 among the best results so far for 23 nonprofits created by the health law. in Iowa and Nebraska has also signed up more than 50,000; Colorado HealthOP, close to 9,000.
Co-op bosses were in Washington for a NASHCO meeting this week and talked to reporters afterward.
Created by the health law to increase insurance competition and innovation, co-ops as they try to build businesses from scratch while expanding access to care and embracing the chronically ill. The law prohibits them from using their federal startup loans to advertise. recovered as well as CoOportunity Health from online problems that initially frustrated shoppers.
But co-ops present snapshots of progress while emphasizing their community ties and scrappy marketing against giants such as Blue Cross plans, UnitedHealthcare and Humana.
Competing against Anthem BlueCross BlueShield (owned by WellPoint),聽Maine Community Health Options locked up 80 percent of the market in that state for plans offered through an online exchange to individuals and small businesses, said CEO Kevin Lewis. Kentucky Health Cooperative fought Humana and Anthem to win 61 percent of the business in that state, said CEO Janie Miller.
And that was on Louisville-based Humana鈥檚 (revenue of $41 billion last year) home turf, she pointed out.
鈥淭hey have a few more employees than I do,鈥� Miller said. 鈥淲e believe we鈥檙e the health insurance plan of the people.鈥�
In many cases co-ops are selling high-benefit platinum plans rather than the less-expensive bronze or silver policies expected to win almost all the business 鈥� even to younger consumers, officials said.
鈥淓verybody said, 鈥極h, we鈥檒l have these 鈥� bronze plans and everybody will take the cheapest plan,鈥欌�� said David Lyons, CEO of Iowa and Nebraska鈥檚 CoOportunity Health. 鈥淲e have more people enrolling in our platinum plans than we do in bronze.鈥�
So far co-ops have won between 15 and 20 percent of the total signups in the their 23 states, Morrison estimated. Open enrollment for 2014 ends March 31.
By adding competition and lowering prices, the community-run cooperatives will save billions for the consumers and taxpayers paying for insurance, Morrison said. Premiums in states with co-ops are 8.5 percent lower on average than in states without them, he said. While that relationship doesn鈥檛 prove cause and effect, 鈥渘obody鈥檚 offered another explanation for why that might be true,鈥� he said.
Three co-ops are jumping borders. Montana Health CO-OP is setting up business in Idaho. in Massachusetts is moving into New Hampshire. Kentucky Health Cooperative will start selling in West Virginia.
Even though the 2013 fiscal cliff budget deal to put co-ops in most remaining states, enough money remains to finance next year鈥檚 additions, officials said.
Membership alone doesn鈥檛 ensure co-ops鈥� success. Next they have to control medical costs to ensure their prices stay competitive.
鈥淟ike I said, interesting but thin data,鈥� CoOportunity Health鈥檚 Lyons said of the sign-up results. 鈥淕ive us another year and we鈥檒l be able to figure out what all this means.鈥�
Meanwhile, now that they have payrolls and claims to pay, co-ops show signs of shedding some of their dissident, outsider status.
Karen Ignagni, who as the health insurance industry鈥檚 top lobbyist five years ago about their creation, accepted NASHCO鈥檚 invitation to speak at the group鈥檚 meeting this week. Some co-ops have even joined Ignagni鈥檚 group, America鈥檚 Health Insurance Plans.