CO-OPs Enroll More Than 400,000 in ACA Health Exchanges
WASHINGTON //BestWire// - More than 400,000 people have enrolled in Consumer Operated and Oriented Plans through health exchanges, according to the National Alliance of State Health CO-OPs.
The Affordable Care Act provided for CO-OP formation to hold down rates by creating competition with health insurance providers in the state- and federally run health insurance exchanges that began operation last year. The 400,000 estimated by NASHCO is roughly 5% of the 8 million exchange enrollees nationwide announced in May by the Department of Health and Human Services, although the CO-OPs were only operating in 24 states.
NASHCO is happy about the initial first-year enrollments for its members. "These numbers show that CO-OPs are indeed making a real impact on the health insurance marketplaces in their states," said Martin Hickey, chairman of the NASHCO board, as well as president and chief executive officer of New Mexico Health Connections. "Health insurance CO-OPs are driving innovation, competition and affordability in their individual states."
CO-OPs in Maine and Kentucky claimed very large portions of their state markets since enrollment began last fall, with Maine Community Health Options estimating it had nearly 80% of the state's total.
Hickey said expansions of CO-OPs into neighboring states are likely to inflate the current numbers. Licensed expansions have already been obtained by Maine Community Health and the Massachusetts CO-OP Minuteman Health Inc. into New Hampshire and by Kentucky Health Cooperative into West Virginia. Still under consideration is a planned expansion of the Montana Health Cooperative into Idaho.
New Hampshire had just one provider for its exchange in 2014, but the expansion showed a total of five companies -- including the two CO-OPs -- would compete for business in 2015.
At least one study of the impact of CO-OPs showed their presence had the desired effect of reducing rates. The analysis by Carpenter Consulting included data from 19 states that had CO-OPs operating. It showed CO-OP states' average premium rates for the bronze and silver tiers -- the two least-expensive of four tiers in the exchanges -- were anywhere from 8.4% to 9.4% lower than states that did not have CO-OPs.
Another report from McKinsey and Co. last fall said CO-OPs offered the most plans of insurers and that CO-OPs in 22 states offered 37% of the lowest-priced plans. The McKinsey report said in instances where CO-OPs were not the low option, they were the most likely carrier to be within 10% of the cheapest plan.
(By Thomas Harman, associate editor, BestWeek: Tom.Harman@ambest.com)