States have lost out on co-ops

Healthcare’s geographic variation was made all the more patchy by the fiscal cliff deal struck on January 1. The deal abruptly shut down a loan program meant to launch state-based co-op health plans-before all the states could take advantage of it.

Twenty-six states have now missed out on any real chance of creating co-op health plans simply because of unfortunate timing, while 24 states are moving forward with the federal co-op loans they secured in 2012. The program was part of the Patient Protection and Affordable Care Act.

In Congress’ deal, a remaining balance of $1.9 billion was trimmed away from the $3.8 billion program. The federal government will not renege on the loans granted to co-ops previously, but the program has come to an end.

Co-ops are not-for-profit, member-run health plans that follow the same rules as other insurers; however, they must reinvest any excess revenue into benefits and lower premiums. The startups would most likely aim to compete on price inside and outside of the insurance exchanges. Each will need to earn a license from the state and set up a board of directors that includes plan members.

Co-op organizations without federal loans will have a difficult time finding other resources. Even the active plans aren’t guaranteed success once open enrollment begins, and they must pay back the federal loans between five and 15 years’ time, regardless. A 10% cushion was allowed in the fiscal cliff deal to cover the administrative costs for the existing loans.

Federal Loans for Co-ops

Compass Cooperative Health Network


Arizona

$93,313,233


Colorado Health Insurance Cooperative, Inc.

Colorado


$69,396,000


HealthyCT


Connecticut


$75,801,000


Land of Lincoln Health

Illinois


$160,154,812


CoOpportunity Health

Iowa and Nebraska


$112,612,100


Kentucky Health Care Cooperative


Kentucky

$58,831,500

Louisiana Health Cooperative, Inc.


Louisiana


$65,040,660


Maine Community Health Options

Maine


$62,100,000


Evergreen Health Cooperative Inc.


Maryland

$65,450,900


Minutemen Health, Inc.


Massachusetts

$88,498,080


Michigan Consumer’s Healthcare CO-OP


Michigan


$71,534,300

Montana Health Cooperative


Montana


$58,138,300


Hospitality Health CO-OP


Nevada


$65,925,396


Freelancers CO-OP of New Jersey


New Jersey


$107,213,300


New Mexico Health Connections


New Mexico


$70,364,500


Freelancers Health Service Corporation


New York

$174,445,000


Coordinated Health Plans of Ohio, Inc.


Ohio


$129,225,604


Freelancers CO-OP of Oregon

Oregon


$59,487,500


Oregon’s Health CO-OP

Oregon


$56,656,900

Consumers’ Choice Health Insurance Company

South Carolina


$87,578,208


Community Health Alliance Mutual Insurance Company


Tennessee


$73,306,700

Aarches Community Health Care

Utah

$85,400,303


The Vermont Health CO-OP

Vermont


$33,837,800

Common Ground Healthcare Cooperative


Wisconsin

$56,416,600