http://wendellpotter.com/2012/05/could-nonprofit-health-insurance-plans-be-the-real-reformers/
I’m happy to report that I might have been wrong. In fact, CO-OPs could be one of the sleepers in the health care reform law that truly transforms how care is financed and delivered in this country. And they could even hasten the day when the big investor-owned corporations cede the marketplace to nonprofits and move on to other ways of earning a profit.
That’s because of the financial assistance that eligible nonprofit groups are getting from the federal government — thanks to the Affordable Care Act — and also because of the approaches the groups being selected for solvency and start-up loans are taking to get their operations up and running.
To date, the Department of Health and Human Services has awarded more than $982 million in low-interest loans to 12-nonprofit groups from California to Maine to help them overcome those barriers to entry. The reform law provides a total of $3.4 billion in loans for local groups that meet high eligibility criteria, so several more prospective CO-OPs will be selected in the months ahead. We’re not talking about grants here. The start-up money must be repaid to the government — with interest. All of the CO-OPs will have to offer coverage through the Internet-based marketplaces (exchanges) the reform law requires states to establish by January 1, 2014.
If all goes as planned, every state will have at least one CO-OP. And there are reports that at least one plan already has negotiated a good rate with local hospitals by explaining how CO-OPs can help them reduce the amount of uncompensated care they incur every year by treating uninsured patients.
However, fiscal cliff bill cut funding for nonprofit health co-ops:
http://www.nonprofitquarterly.org/policysocial-context/21586-while-you-were-sleeping-fiscal-cliff-deal-whacked-obamacare-nonprofit-co-ops.html
When the “public option” was ditched, lawmakers included provisions in the Affordable Care Act to support the creation of nonprofit health insurance cooperatives, including start-up funding (the program was called Consumer Oriented and Operated Plans). But the fiscal cliff bill eliminated funding that might have gone to new nonprofit health insurance cooperatives. Therefore, the nonprofit health insurance cooperative that is furthest along in its plans, in Montana, won’t lose money that it had already received from the federal government, but the cliff legislation eliminates its access to funding to expand into Wyoming and Idaho, where no local nonprofit cooperatives are in the works.
Overall, the cliff bill doesn’t stop the efforts of the 24 nonprofit cooperatives that have already been approved for approximately $2 billion in start-up loans from the Department of Health and Human Services, but it sinks plans for nonprofit cooperatives in another 26 states. Was this a money-saving effort for cutting the budget deficit? No. The cooperative funding was start-up loan money, most of which would presumably be repaid. Congress had already slashed start-up money in the ACA from $6 billion down to $3.4 billion in the last set of budget negotiations last year. Now, the cliff bill eliminates all new start-up loans, even for efforts that were in the planning and proposal stages, such as the Montana co-op’s plans for Wyoming and Idaho.
For nonprofit insurers, the cliff bill created winners and losers. The winners, who got their plans approved in 2012, included the likes of Coordinated Health Plans of Ohio, which got a $129 million loan in October, a farmer’s union in Colorado, the Freelancers Union in New York, and a culinary health fund in Nevada. The losers—those who were still inking the final details of their plans to submit to the U.S. Department of Health and Human Services—are the co-ops in the remaining 26 states whose plans were “torpedo(ed),” in the words of John Morrison, president of the National Alliance of State Heath Cooperatives. Co-ops in the application stages, such as the Kansas Health Cooperative, were “blindsided” by the fiscal cliff bill, to use Morrison’s description. Now, they’re but basically out of luck, especially in a state like Kansas, where Gov. Sam Brownback was hostile to many of the provisions of the Affordable Care Act from the get-go, leaving the cooperative without alternative funding options.
= new reply since forum marked as read
