There were 23 in 2014.

The public knows them as co-ops. They’re officially called consumer operated and oriented plans in the health law. Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will disappear by fall due to financial insolvency.  Oregon’s Health Co-Op and Connecticut’s HealthyCT were told to close by their state’s regulators last week. Tuesday, the Land of Lincoln Mutual Health Insurance Co. in Illinois was ordered to close by state regulators.

“They are not essential for the success of the Affordable Care Act, but they do offer an important alternative to commercial insurers,” said Timothy Jost, a law professor at Washington and Lee University in Virginia and an expert on the health law.

Operated as nonprofits and seeded with federal loans, co-ops were conceived as an alternative to commercial insurance. Co-ops’ members serve on the board. Advocates envisioned co-ops spurring competition by giving Americans a way to buy health insurance from companies with a strong consumer focus.

But many struggled early — and their problems became part of the highly politicized debate over the law on Capitol Hill. Either they increased enrollments too fast, and then could not keep up with rising health costs, or they could not gain enough members to help spread their costs.

Shortfalls in anticipated levels of federal funding contributed, too. At the end of 2014, for example, insurers got blindsided when money they had counted on to offset losses was cut sharply from the .  That program transfers funds from participating insurers with high profits to those with high losses. The move disproportionately hurt small insurers, according to the nonpartisan

For the 2017 enrollment season, most co-ops have proposed increasing premiums, often by at least 10 percent. But raising premiums is only part of the solution.

Maine’s co-op, Maine Community Health Options, has contracted with a new pharmacy benefit manager, Express Scripts, with the aim of saving about $14 million annually by paying lower drug prices.

It has 80,000 members, about 60 percent of the Obamacare marketplace in the state. But the co-op estimated it has less than 5 percent of the market when large employers are included, a group it now will court for new customers.

Maine Community Health is on track to make money, but not until 2017, said CEO Kevin Lewis.

New Mexico Health Connections, a co-op with 47,000 members, is seeking to raise money from investors, which the Obama administration only recently allowed co-ops to do, said the CEO, Dr. Martin Hickey. It’s also adding larger employers and labor groups, including some teacher unions, to its client base.

“The only way to survive is to diversify,” Hickey said.

Montana Health Co-Op, which has about 35,000 members in Idaho and Montana, is focused on holding down administrative costs. It has about 20 full-time employees and hasn’t replaced some that left. “Some people we had during our startup mode we figured we can now work without them,” said spokeswoman Karen Early.

Montana Health, which lost about $40 million in 2015, also has requested an average premium increase of 21 percent in Idaho for next year and 22 percent in Montana, she said.

Maryland’s co-op, Evergreen Health, is challenging the federal government’s decision last week ordering it to pay $24 million to other state insurers whose members had higher health risks in 2015.

In addition to the health law’s risk corridor program, which partially reimburses insurers for extreme losses, another provision requires insurers to make payments to competitors with sicker and costlier members. That is a sore point for Evergreen. The co-op, which has about 40,000 members, sued the government in June, alleging that the risk-adjustment system is flawed because it does not adequately measure risk. The lawsuit is pending in federal court and a decision is expected this summer.

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The failure of Colorado’s co-op has hit Rick and Letha Heitman hard. They are currently customers of the Colorado HealthOP, which is closing up shop at the end of the year. The couple, who own a contracting business, say the co-op proved to be a life-saver when Rick was diagnosed with aggressive prostate cancer last spring.

“I owe them for taking care of me. They helped me at a time when I needed it a lot,” he says.

“We were really blindsided by that,” she says. “We felt like we’d done our part in helping serve individuals who really need insurance and now we’re the one left holding the bag.”

And, she insists the co-op was on track to be profitable. Colorado HealthOp is one of in 22 states that opened after Obamacare was enacted. The startups were supposed to shake up the traditional marketplace by being member-owned and nonprofit, but it was tough to figure out how much to charge. They needed to estimate how much medical care their customers would use, and they had to do that without data from previous years and without the cushion of a reserve fund. Established insurers can use reserves and experience to recover if they underestimate premium prices in a given year.

Many co-op plans were priced low, and . But these new customers had high health costs, so the co-ops had to start paying a lot of bills. The math didn’t add up. On top of that, they were counting on a variety of funding streams from the federal government, and not all of them materialized.

Linda Gorman, with the , a conservative-leaning Colorado think tank, says the new co-ops were in over their heads.

“You shouldn’t go into business counting on federal subsidies,” she says. “The notion that you should beat up on for-profit entities and then form these nonprofits and everything will be magically OK is unfortunate to begin with. We’ve wasted a lot of taxpayer money on that.”

But the HealthOP’s senior IT manager Helen Hadji, a Republican, blames conservatives in Congress for to keep the cooperatives afloat.

“This is a federal failure,” she says. “This is all a political battle to dismantle Obamacare.”

Colorado’s co-op captured 40 percent of the individual market on the state’s exchange. Now as customers, like the Heitmans, hunt for new insurance, they are finding higher prices: They paid about $500 a month last year. Next year, it could be double or triple that.

“You know, that’s a big ‘owee!’” says Letha Heitman.

But it’s the price they’ll pay to keep Rick with the doctors who are treating his cancer.

In Connecticut, the opposite story is playing out. If Colorado saw an early surge in membership because of low prices, Connecticut’s co-op nearly priced itself out of the market in its first year. With rates much higher than its competitors, HealthyCT only got 3 percent of the state’s business under the Affordable Care Act.

“In that first year, the reason we had such low market share was that consumers — new to the industry, new to insurance — most of those individuals bought on price,” says Ken Lalime, who runs the co-op.

And, he says, starting it was hard.

“Nobody’s built a new insurance company in the state of Connecticut in 30 years,” he says. “There’s no book that you pull off the shelf and say, ‘Let’s go do this.’”

Lalime faced the same problem as insurers across the country: He didn’t know who his customers would be, he didn’t know whether they’d be sick or healthy, and he didn’t know how much to charge. It turns out he ended up charging too much.

But even though that meant relatively few signups in year one, the slow ramp-up actually helped. He didn’t have a huge number of claims to pay right out of the gate, and the ones he did pay didn’t break the bank.

“Hindsight, yes, that didn’t hurt us. To be able to take it slowly,” he says.

In year two, he had more competitive average premiums — and his company went from 3 percent market share to 18 percent. For 2016, HealthyCT and the state — after some back and forth — settled on a 7 percent premium hike for customers.

Paul Lombardo is an actuary for the state. He says that bouncing around is an indicator that setting premiums under the Affordable Care Act is still a bit of a gamble. That’s in part because there’s still no good data. So few people signed up with HealthyCT in the beginning that they didn’t have enough information to help set 2016 premiums.

“There wasn’t a lot of data to say, OK, we can use 2014 experience to project forward,” Lombardo says.

For now, at least, Lombardo says HealthyCT is holding its own.

“They’re in good standing,” he says. “The premium we think that we’re setting for 2016 — albeit a little bit higher than they wanted it to be on the revision — is appropriate.”

Enrollment for health insurance in the co-ops runs through Jan. 31 with just 11 of the original 23 co-ops still in business.

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Â鶹ŮÓÅ Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Â鶹ŮÓÅ—an independent source of health policy research, polling, and journalism. Learn more about .

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