State Exchanges to Offer ‘CO-OPs’

Small businesses and individuals may soon be able to approach their state’s insurance exchanges, created through the ACA, and contract with private, not-for-profit organizations that sell health insurance products like HMOs or PPOs. Called CO-OPs (Consumer Oriented and Operated Plans), these organizations are made up of a board of members and are designed to offer quality, affordable, and consumer-friendly health plans in every state.

These CO-OPs will be subject to the same rules as other insurers, with a few exceptions. CO-OPs will:

  • Give enrollees a say in the health plan. Members elect the board of directors, a majority of whom must be enrolled in the CO-OP.
  • Use profits to benefit enrollees by offering lower premiums, robust benefits, high quality health care, and expanded coverage.
  • Educate enrollees about the plan and give enrollees a choice in how the health plan is administered.

The Centers for Medicare and Medicaid Services proposed standards for CO-OPs in July. Eligible organizations interested in establishing a CO-OP will be able to apply for a portion of the $3.8 billion in repayable loans made available under the ACA to fund start-up and capitalization costs. The proposed rules can be found at

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