The Affordable Care Act will soon be providing consumers and small businesses with the opportunity to take advantage of their state Affordable Insurance Exchange, so that they can obtain cheaper healthcare through a new form of health plan known as a Consumer Oriented and Operating Plan (CO-OP).
CO-OP health insurers are private and non-profit, with a board comprised of members, so that affordable, high quality health plans will be available in a consumer-friendly way across every state.
The proposed standards for the establishment of CO-OP health insurance plans were outlined by the U.S. Department of Health and Human Services (HHS) on July 18, 2011. An independent advisory group was responsible for providing the recommendations for building the proposed standards. To create them, they used public testimony from insurance providers, small businesses, and consumers.
Insurers that are eligible for creating a CO-OP will be permitted to apply for their part of a total $3.8 billion in repayable loans, offered through the Affordable Care Act. These loans are designed to assist with the costs of start-up and capitalization.
A CO-OP can be any health insurance coverage provider, such as a Preferred Provider Organization (PPO) or a Health Maintenance Organization (HMO), and must adhere to the same regulations as other health insurance company.
That said, CO-OPs differ from many of today’s health insurers for the following reasons:
• Members have a voice in their health plans, by electing their board of directors; the majority of whom must be enrollees.
• Profits are used for member benefit, such as decreasing premiums, improving health care quality, increasing benefits, widening enrollment, or bettering the future of member coverage in some other way.
• CO-OPs provide plan members with effective communication and an education about the plan in order to allow them to better direct the plan and its key features.
The nature of a CO-OP gives individuals and small businesses the opportunity to maintain some control over their health insurance in a similar way to what larger organizations are currently capable of obtaining.