OIG: CO-OPs Progressing, But Success is Unpredictable

The new Consumer Operated and Oriented Plans, created under the healthcare reform law, are nearly ready to start offering qualified health plans on the health insurance exchanges, but predicting their success depends on several factors, according to a report from the HHS' Office of Inspector General.

The Patient Protection and Affordable Care Act created CO-OPs, which are non-profit, consumer-governed health insurers. Currently, there are 24 CO-OPs throughout the country, and they have received almost $2 billion in federal loans to get their projects off the ground.

The OIG reviewed 18 of the 24 CO-OPs, finding they have met 90 percent of their goals thus far. Goals included getting licensed by their respective states, hiring staff and contracting with vendors and providers. As of June 2013, 19 of the 24 total CO-OPs received insurance licenses from their states.

In addition, the OIG found CMS is meeting with CO-OPs two to four times per month to monitor progress and ensure they meet required deadlines.

However, the government said although CO-OPs "appear to be making progress," their long-term viability depends on several unpredictable factors, such as how the state is operating its exchange, enrollment, medical costs of those who enroll and how competing health insurers will affect the CO-OP's market share.

Earlier this year, Congress eliminated the remaining $1.4 billion allotted to the CO-OP program, meaning 26 states do not have a CO-OP to offer plans in their exchanges. To read our interview with Janice VanRiper, PhD, executive director of the National Alliance of State Health CO-OPs, click here.

More Articles on CO-OPs:
6 Health Insurers Sign Onto Illinois' Insurance Marketplace
Covenant Health, Tennova Sign Deal With Tennessee's CO-OP
University of Iowa Health Alliance Partners With Multistate CO-OP

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