Health Affairs

The CO-OP Health Insurance Program

Bethesda, MD -- A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation discusses the Consumer Operated and Oriented Plan (CO-OP) program, a provision of the Affordable Care Act. Starting in October, many Americans will be able to enroll in health plans through the health insurance exchanges in their states. Recognizing that in some states a person's options for insurance plans may be limited, the CO-OP program was designed to increase competition among health plans and improve consumer choice by creating new, nonprofit insurance plans governed by consumers. The federal government has awarded nearly $2 billion in loans to help create 24 new CO-OPs in 24 different states.

This policy brief describes the rationale for creating the CO-OP program and the way the program will be structured. It also lists some of the plans approved thus far. Other topics include:

• What are the concerns? Some analysts question whether the federal loan initiative was a wise use of taxpayer funds, since many CO-OPs will be competing against well-known insurance companies and run the risk of failure. To be competitive, CO-OPs will need to offer access to high-quality providers and provide a broad range of services. Achieving these goals may be challenging for new companies lacking in resources and brand recognition.
  
  
• What's next? CO-OPs are expected to be ready for open enrollment in October with coverage effective January 1, 2014. Analysts are waiting to see whether the new plans can compete in the marketplace. Those CO-OPs that do succeed may offer lessons for other health systems and insurers striving to provide higher-quality care at lower cost.

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at www.healthaffairs.org. Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.