US government changes rules to incentivise states to bail out healthcare CO-OPs

01 Jun 2016

Healthcare consumer oriented and operated plans (CO-OPs) in the USA could be bailed out by states, as a result of changes announced by the Obama administration. To incentivise states to save CO-OPs, the government is giving them the chance to appoint state employees or officials with expertise on the board of CO-OPs.

Set up under the Affordable Care Act, these CO-OPs are consumer owned, though not all of them work as co-operatives. All CO-OPs have a board made up and elected by their members and they also need to work on a non-profit basis.

Of the 23 CO-OPs initially set up, 12 had to close down after the government cut funding. Kelly Crowe, chief executive of the National Alliance of State Health CO-OPs (NASHCO), welcomed the announcement.

She said: “Access to additional capital has long been one of the CO-OPs’ top concerns, and we appreciate CMS’s willingness to clear some of the governance hurdles that have made investing in the CO-OPs difficult for potential investors. In addition, closing the special enrolment period loophole is a positive development for CO-OPs and all marketplace insurers.

“We also applaud CMS for acknowledging that states have the authority to consider local market solutions to address the impacts of an unpredictable risk adjustment program on small and rapidly growing health insurers, including CO-OPs. We look forward to working with the individual state regulators to find equitable solutions to this challenge as CMS considers broader changes to risk adjustment”.

Photo: staff from CoOportunity Health, a consumer oriented and operated plan in Iowa that was liquidated last year

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