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Filed Under:Health Insurance, Individual Health

NAHU Looks at the CO-OPs

Are They Good for the Agents?

Monica Lindeen (AP photo/Matt Gouras)
Monica Lindeen (AP photo/Matt Gouras)

The National Association of Health Underwriters (NAHU) has put out a commentary summarizing what it knows about the new Consumer Operated and Oriented Plan (CO-OP) program.

NAHU, Washington, has not taken a position supporting or opposing the CO-OP program, but the health producer group reports that the participants in a recent CO-OP organizer meeting seemed to be friendly to agents and brokers.

"One of the central points reiterated by various speakers at the meeting is that CO-OP plans need to work with brokers in order to be a viable option in the marketplace," NAHU says.

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the CO-OP program in an effort to increase the level of competition in the health insurance market. PPACA Section 1322 calls for the CO-OP plans to sell coverage through the exchanges, or Web-based health insurance supermarkets, that PPACA is supposed to create, and to get "substantially all" of their business from individuals and small groups.

A CO-OP plan could operate in a whole state or in part of a state, or in multiple states. A CO-OP would be licensed as an insurer in each state in which it operates.

Although a CO-OP plan would offer coverage through the exchange system, it also could sell coverage outside of an exchange, according to officials at the Center for Consumer Information and Insurance Oversight (CCIIO), the arm of the U.S. Department of Health and Human Services responsible for bringing the CO-OP program to life.

Congress has allocated a total of $3.4 billion in CO-OP loan funding, and CCIIO officials are hoping entities will start CO-OP programs that will serve each state and the District of Columbia.

The CCIIO recently announced it was making about $639 million in loans to seven would-be CO-OP organizers.

Affiliates of Freelancers Union, New York, received three of the loans. A group led by John Morrison, the former Montana insurance commissioner, received a CO-OP loan for Montana. Morrison is the president of the National Alliance of State Health Cooperatives (NASHCO), Helena, Mont., the CO-OP organizer trade group that set up the CO-OP organizer meeting.

Monica Lindeen, the current Montana commissioner, was one of the speakers at the meeting.

The NASHCO organizer meeting took place last week in Washington and attracted about 150 participants, including representatives from 27 CO-OP development groups, NASCHO says.

The CO-OP development groups are trying to start CO-OPs that would serve a total of 32 states.

NAHU sent Brooke Bell, a member of its government relations staff, and several members to the meeting.

States can choose between running their own insurance exchanges and letting the federal government provide exchange services for their residents.

Lindeen, a Democrat, and another Democratic speaker at the NASHCO meeting, Mississippi Gov. Ronnie Musgrove, said CO-OP attendees should work with state lawmakers on creating exchanges, because, they argued, state-based exchanges likely would be more flexible and friendlier to CO-OP plans, NAHU says.

Correction: An earlier version of this article described NAHU's location incorrectly. NAHU has moved to Washington.

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Nichole Morford

Nichole Morford
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