National Alliance of Health CO-OPs Ready to Do Business October 1st Thanks to ACA

by Patrick Riley 12 Sep 2013
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One of the little known or discussed provisions of the Affordable Care Act was the creation and funding of what is known as health co-ops. Originally, each state was intended to establish one but Congress pulled the funding plug, yet, roughly 24 states now have one. Their design was to go head-to-head with the biggest carriers like Blue Cross, Aetna, UnitedHealthcare and all other commercial insurance carriers.

What is unique about these not-for-profit ventures is that their business plan targets high utilizers and high cost patients that are chronically ill. And the monies received from the federal government, unlike the approved health plans, cannot be used for advertising.

Hospitals, so far, have welcomed the co-ops as community partners who, in theory, will take the sickest of the sick and enroll them, intervene, and get them the meds they need and the follow up required to keep them healthier and out of the ERs. Co-op owners say they will fund their operations with health-act reinsurance dollars designed to temporarily comopensate plans with high expenses and by managing treatment more efficiently.

Critics predict co-ops will go the way of .com startups in the '90s. But, so far, they appear to have found a niche in the sprawling new landscape for health insurance markets. We shall see.

You can follow me on Twitter to learn more about health insurance marketplaces @Patrick_FrostHC or read my daily blogs on in the healthcare industry section of our coporate Website.

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