The organizers of the new “CO-OP” program cooperative health insurers are facing plenty of competition and strict scrutiny, the head of their trade group says.
John Morrison, president of the National Alliance of State Health CO-OPs (NASHCO), Helena, Mont., gave those assurances in a letter sent on behalf of NASHCO to the Republican leaders of the House Energy and Commerce Committee.
The Republican committee leaders recently asked CO-OP backers to discuss how well prepared CO-OP organizers would be to pay back federal CO-OP startup and capital loans.
“We are confident that a close examination of the CO-OP movement will reveal what we already know: CO-OPs have tremendous potential to transform the health insurance market in positive ways,” Morrison, a former Montana insurance commissioner, writes in the letter.
The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the CO-OP program in an effort to increase the level of competition in the health insurance market. PPACA Section 1322 calls for the CO-OP plans to sell coverage through the exchanges, or Web-based health insurance supermarkets, that PPACA is supposed to create, and to get “substantially all” of their business from individuals and small groups.
A CO-OP plan could operate in a whole state or in part of a state, or in multiple states. A CO-OP would be licensed as an insurer in each state in which it operates.