Health Plans Interfacing
Centers for Medicare & Medicaid Services (CMS) is encouraging the creation of consumer operated and oriented plans (CO-OPs). A CO-OP is a private, non-profit organization that sells health insurance coverage, similar to a health maintenance organization (HMO) or a preferred provider organization (PPO), and will be subject to the same rules as other health insurers. All profits are used to benefit members by lowering premiums, for example, or improving health benefits.
CMS is proposing standards for CO-OPs and for qualifying for $3.8 billion in repayable loans to help start up and capitalize the new health plans. All CO-OP loans must be repaid with interest, and loans will only be made to private, non-profit entities that demonstrate a high probability of becoming financially viable.
CO-OPs will sell coverage through a state’s affordable insurance exchange as well as have the opportunity to sell coverage to small businesses through a state’s small business health option programs (SHOP exchanges). According to CMS, several successful health insurance cooperatives currently exist around the country, covering nearly 2 million individuals. A number of diverse groups are organizing to take advantage of this new opportunity. In one state, primary care providers are working to create a CO-OP to focus on care for rural areas. In another, a CO-OP steering committee has been formed by interested physicians, technology and business experts, and community groups.
The CO-OP program provides for loans to private entities with the goal to create a new CO-OP in every state to expand the number of exchange health plans with a focus on consumer accountability. The CO-OP program contains extensive provisions to protect against fraud, waste and abuse. Loan recipients are subject to strict monitoring, audits and reporting requirements for the length of the loan repayment period plus 10 years.
CMS will accept comments on the proposed rule until September 16, 2011.
