The U.S. Department of Health and Human Services (HHS) could start issuing loans to would-be organizers of a new breed of nonprofit health plans as early as Jan. 12, 2012.
Bradford Gray, a senior fellow at the Urban Institute, Washington, has written about the prospects of the embryonic Consumer Operated and Oriented Plan (CO-OP) plans in a commentary distributed by the institute.
The CO-OP provision of the Patient Protection and Affordable Care Act of 2010 (PPACA) is supposed to create plans that would be owned and run by consumers, with no ties whatsoever to the for-profit or nonprofit health insurers that existed before PPACA was enacted.
PPACA calls for CO-OPs to start selling coverage through the new PPACA health insurance distribution exchanges in 2014.
PPACA bill negotiators added the CO-OP provision in an effort to bridge the gap between Democrats who wanted to create a single-payer, "Medicare for all program" or a Medicare-like "public option" that would compete with private plans, and Democrats who favored protecting the existing role of non-government health plans.
Gray says the United States went down what seems to be a similar path 34 years ago, when Congress pased the Health Maintenance Organization Act of 1973.
"That measure (as amended in 1976) contributed to the eventual rise of a managed care industry that bore little relationship to the prepaid group practice model that had inspired the legislation," Gray says. "Many of the start-up health maintenance organizations (HMOs) — particularly those that took the form of independent practice organizations or IPAs—converted to for-profit status in the 1980s and became part of the consolidation that resulted in today’s health insurance giants"
One open question about the CO-OPs is whether they will succeed at attracting funding, and another is whether the CO-OPs that get off the ground will become what the PPACA CO-OP provision drafters envisioned, Gray says.
But potential sponsors have surfaced in at least 25 states, and many of those potential sponsors already have experience with other types of successful cooperatives, Gray says.
"The COOP program has features that warrant ongoing attention to their development," Gray says.