Co-Ops Report Early Enrollment Successes And Expansion Plans

The Affordable Care Act’s nonprofit co-op health plans, which see themselves as the rebel alliance battling established insurers, have signed close to 300,000 members and are set to expand into three new states next year, officials say.

Starting from zero in October, New York’s Health Republic Insurance has enrolled more than 50,000 policyholders, said John Morrison, who just stepped down as founding president of the National Alliance of State Health CO-OPs. That’s among the best results so far for 23 nonprofits created by the health law. CoOportunity Health in Iowa and Nebraska has also signed up more than 50,000; Colorado HealthOP, close to 9,000.

Co-op bosses were in Washington for a NASHCO meeting this week and talked to reporters afterward.

Created by the health law to increase insurance competition and innovation, co-ops face big challenges as they try to build businesses from scratch while expanding access to care and embracing the chronically ill. The law prohibits them from using their federal startup loans to advertise. Not all of them recovered as well as CoOportunity Health from online problems that initially frustrated shoppers.

But co-ops present snapshots of progress while emphasizing their community ties and scrappy marketing against giants such as Blue Cross plans, UnitedHealthcare and Humana.

Competing against Anthem BlueCross BlueShield (owned by WellPoint), Maine Community Health Options locked up 80 percent of the market in that state for plans offered through an online exchange to individuals and small businesses, said CEO Kevin Lewis. Kentucky Health Cooperative fought Humana and Anthem to win 61 percent of the business in that state, said CEO Janie Miller.

And that was on Louisville-based Humana’s (revenue of $41 billion last year) home turf, she pointed out.

“They have a few more employees than I do,” Miller said. “We believe we’re the health insurance plan of the people.”

In many cases co-ops are selling high-benefit platinum plans rather than the less-expensive bronze or silver policies expected to win almost all the business — even to younger consumers, officials said.

“Everybody said, ‘Oh, we’ll have these … bronze plans and everybody will take the cheapest plan,'” said David Lyons, CEO of Iowa and Nebraska’s CoOportunity Health. “We have more people enrolling in our platinum plans than we do in bronze.”

So far co-ops have won between 15 and 20 percent of the total signups in the their 23 states, Morrison estimated. Open enrollment for 2014 ends March 31.

By adding competition and lowering prices, the community-run cooperatives will save billions for the consumers and taxpayers paying for insurance, Morrison said. Premiums in states with co-ops are 8.5 percent lower on average than in states without them, he said. While that relationship doesn’t prove cause and effect, “nobody’s offered another explanation for why that might be true,” he said.

Three co-ops are jumping borders. Montana Health CO-OP is setting up business in Idaho. Minuteman Health in Massachusetts is moving into New Hampshire. Kentucky Health Cooperative will start selling in West Virginia.

Even though the 2013 fiscal cliff budget deal eliminated funds to put co-ops in most remaining states, enough money remains to finance next year’s additions, officials said.

Membership alone doesn’t ensure co-ops’ success. Next they have to control medical costs to ensure their prices stay competitive.

“Like I said, interesting but thin data,” CoOportunity Health’s Lyons said of the sign-up results. “Give us another year and we’ll be able to figure out what all this means.”

Meanwhile, now that they have payrolls and claims to pay, co-ops show signs of shedding some of their dissident, outsider status.

Karen Ignagni, who as the health insurance industry’s top lobbyist raised concerns five years ago about their creation, accepted NASHCO’s invitation to speak at the group’s meeting this week. Some co-ops have even joined Ignagni’s group, America’s Health Insurance Plans.