Will The Co-Ops Survive?

When the Affordable Care Act was passed several Health Insurance Co-Ops were created to move away from the traditional healthcare insurers. Grace-Marie Turner with the Galen Institute states, “The co-ops were founded on the idealistic belief that community members could band together to create health insurance companies that would be member-driven, service-oriented, and would not have to answer to shareholders or turn a profit.” This ideal is wonderful, but each of these co-ops are startup companies that are having growing pains. They are each trying to find the balance of premium cost versus losses taken.

co-opsSeveral of the co-ops had a slower start in 2014 as their first year of operation, and still took losses. This year in 2015 you had co-ops that raised their premiums to compensate for their 2014 losses and those that took on a much larger client base after their slow start the previous year. Many of the co-ops offered the lowest premiums in the state for 2015 which appeals to individuals resulting in high enrollment. As premium amounts have been submitted for approval for the 2016 enrollment year we are seeing yet another premium spike for the co-ops to stay afloat.

Out of the 23 co-ops that were started some are already having to close their doors just one year into operation.  Iowa’s CoOportunity Health had to liquidate in January of 2015 sending 120,000 individuals to find insurance elsewhere. There are several other co-ops that have reported losses that were even worse than Iowa’s, but have managed to stay afloat. It will be very interesting to see what the future years hold in store for co-ops as they ebb away from growing pains and into sustainable health insurance providers or will have to liquidate like Iowa did. What do you predict the future for health insurance co-ops will be and what do you think will ensure they continue operating efficiently? Read the full article by Grace-Marie Turner HERE

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