CO-OPs - The Stealth Public Option Under the ACA?

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Last week, the Massachusetts CO-OP was approved by the federales under a provision of the Affordable Care Act that was key to the Act's passage, yet not widely known. The Consumer Operated and Oriented Plan, known as the Minuteman Health Initiative, secured a startup loan as part of the approval, intended to cover operational expenses as well as state-mandated reserves.

Congressional proponents of "Medicare for All" (aka the public option) took their lumps when the ACA did not include such an animal -- in part, because it did include the CO-OP requirement: one CO-OP per state, to be a nonprofit founded by providers and run by consumers, whose margins are to be plowed back into premium reductions, improving benefits and improving quality of care. (Don't confuse the CO-OPs with co-ops, which are simply group purchasing cooperatives for health insurance that manage to eke out tiny group discounts. In Massachusetts, co-ops are limited in total enrollment to 85,000, a fraction of the small group and individual market population.) CO-OPs are supposed to be operational in every state, ready to enroll members (and therefore with provider networks already in place) by 2014, so they can get started on an equal footing with other health plans on state exchanges, on offer both to individuals and to employers (though 2/3 of enrollees must be from the individual and small group markets). Founded by providers, they are required to transition to member control within a year of beginning member enrollment.

Did that political horse trade make sense? Do CO-OPs make sense?

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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