Many consumers who shop for coverage on the state health insurance marketplaces this fall have a new option to consider: a health insurance co-op.
The nonprofit, member-run “consumer oriented and operated plans,” or co-ops, were created under the federal health law to enhance competition on the marketplaces and give consumers affordable choices that emphasize patient-focused, coordinated care. Whether these plans will offer a markedly different consumer experience compared to traditional insurance coverage or do a better job helping members get and stay healthy remains to be seen. Co-op managers say that, at a minimum, the plans’ governance structure ensures that consumers’ voices will be heard.
“As a co-op, we’re member-centric,” says Debra Friedman, president and CEO of Health Republic Insurance of New York. “Members are actively involved in setting policies and making decisions. … [They] unite to take control of their health care.” Under the terms of the health law, a majority of co-op board members must be health plan members.
Co-ops were initially planned for all 50 states under the Affordable Care Act. However, the original $6 billion in funding was reduced to roughly $2 billion in low-interest loans for co-ops in 23 states. The model has proved successful in the past. Group Health Cooperative in Washington state and HealthPartners in Minnesota are two of the best known.
Like the other insurance plans offered on the marketplaces, sometimes called exchanges, co-op plans must cover a comprehensive set of 10 “essential health benefits.” The proportion of the costs that consumers pay varies depending on which of four plan types – platinum, gold, silver or bronze — is purchased. Some co-ops will offer coverage both on and off the exchanges.
Many co-ops share common characteristics, says John Morrison, president of the National Alliance of State Health Co-Ops, a trade group. Several have adopted “medical home” models that emphasize primary care and prevention, for example. And instead of relying only on traditional fee-for-service arrangements that pay doctors a la carte for procedures and tests, a number of co-ops are offering providers financial incentives for achieving good health results for their patients.
The plans are very competitively priced, says Morrison.
“In quite a number of states they’re the least expensive plans on the exchange,” he says.
The new co-ops, when they come online in January, will be experimenting with different approaches that often draw on some of the promising ideas that employers, insurers and others have tried in recent years.
In the “primary select” plans offered by New York’s Health Republic Insurance, members won’t have to make any copayment when they visit their primary care provider, and the deductible won’t apply to ambulatory care services, such as doctor visits, lab work and imaging scans. Members in those plans who are hospitalized, however, may face higher costs, says Allison Silvers, the insurer’s chief operating officer.
In developing the benefits, Silvers says they were aware that many members might not have had insurance before.
“To be faced with a sizable deductible before they can access services would throw people for a loop,” she says. In addition, “we wanted to eliminate any cost if you have a relationship with a primary care provider and actually see him.”
At Evergreen Health Co-Op in Maryland, members will join one of four centers located along the I-95 corridor that offer one-stop care through a team of salaried doctors, nurse practitioners, health coaches and care coordinators. Specialists will be able to conduct virtual visits with patients at the center through telemedicine, and review tests and other data electronically, minimizing communication lapses and duplicate tests, says Peter Beilenson, the co-op’s CEO. The staff receives bonuses based on patient outcomes.
And members of some plans at the Colorado HealthOp, will be able to get rewards such as a lower deductible or a $100 debit card for completing certain requirements annually, including taking a health risk questionnaire, getting a checkup and having blood work done, says Julia Hutchins, the co-op’s CEO.
One industry expert says insurers of all types have been moving to improve how health care is provided and paid for.
“Care coordination, disease management and wellness programs have been pioneered by private health plans across the board,” says Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, an industry group whose members includes private and nonprofit health plans, among them established co-ops. “Our industry has an incentive to make sure people get the right care at the right time to help keep people healthy.”
But because they’re nonprofit and member-operated, co-op managers say they have a key advantage over traditional insurers.
“When revenues exceed costs, any excess goes back into improving quality, benefits and reducing premiums,” says Colorado’s Hutchins.
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