There is a provision of the Patient Protection and Affordable Care Act (the “ACA”) that seems to be a “sleeper” in the news, but it could have a very large impact on the market for health insurance. The provision, Section 1322 of the ACA, requires the federal government to provide start up funding for “non profit, member-run health insurance issuers”.
This program (called the “Consumer Operated and Oriented Plan Program” or “CO-OP Program”) is intended to create at least 1, but preferably 2 not-for-profit member run cooperative health insurers in each state. Providers, business associations and even large employers should be following this activity closely and evaluating whether supporting the start of a CO-OP is in their best interests.
● Providers may benefit by sponsoring a new competitor health insurer in the marketplace.
● Providers may benefit by establishing a formative relationship with a health insurer that is required to have a pro-member focus.
● Small employers and business associations may benefit by creating a new innovative competitor offering insurance for their employees and association members.
●State regulators may benefit by monitoring the activities of CO-Op applicants, providing early guidance and ensuring that state laws do not impose barriers to viable organizations.
My next post on this topic will discuss what is known so far about the requirements to form a CO-OP. In the meantime, for those of you who like to go to the original source, the language creating the CO-OP program is Download 1322 CO-OPs. Happy reading!
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