Jan VanRiper and her team at NASHCO, the National Alliance of State Health CO-OPs, aren't just trying to change health insurance, they want to reinvent it.
CO-OP stands not for cooperative, but for "consumer operated and oriented plan." In other words, it's an insurance plan for the people and by the people. There's still not a lot of awareness about what CO-OPs are, says VanRiper, executive director and CEO of the newly formed coalition, which serves as the voice for these health insurance platforms created by the Patient Protection and Affordable Care Act.
VanRiper says the main mission of the organization is to bring down cost while increasing access to and quality of care. She is particularly proud that CO-OPs are being looked at as a potential avenue for quality innovation.
"CO-OPs are part of the answer to those three problems: cost, quality and access," she says, adding that compared to outcomes in other industrialized countries the quality of care versus cost in the U.S. "is way, way down."
VanRiper envisions a future where, instead of patients seeing doctors and specialists and the two not talking to each other, "you focus your care with a primary care provider [that functions as] a manager and a center to know what's going on with you and to help guide you through the health care system," she says. "That's where I think CO-OPs are moving."
But, there's a problem. At the end of 2012, Congress pulled the plug on any further funding for PPACA's CO-OPs, leaving all previously established organizations, and other interested parties not yet funded, without a clear path for the future.
EBA talked with VanRiper, who holds a J.D. and a PhD. in philosophy, about what a CO-OP can do for people and brokers and why Congress should "consider, in its wisdom, to reinstate funding."
What's your mission at NASHCO?
In [PPACA], Congress decided to create a provision for [CO-OPs] and the goal was to create competition in the individual and small-group insurance market.
As you know, there is a dearth of new health insurance carriers around the country for many years and in some states one insurance carrier dominates the market terrifically. And so the thought was, if there was a new type of carrier, and if the government gave them some money, it could bring competition to market and lower costs, too.
The reason for the loan program was because it's very hard to enter the market, so the thought was to give them some loans and technical assistance.
The other reason is to lower costs. They're supposed to be non-profit. Any excess will be plowed back in to lowering premiums or improving the products for the membership, and as the title intimates, they're also designed to be member-governed. The policy holders, individuals and small-group employers have the opportunity to be in the governing body for the CO-OP.
Now, who's NASHCO? We're their trade association. There are 24 CO-OPs the will serve 24 states in the country and we operate to support this new industry of non-profit health insurance carriers and to promote additional ones - well, we did that last part prior to January 1. Congress saw fit to take away the money for additional CO-OPs in the fiscal cliff deal, so if they ever again reinstate that, we'll work on that.
What are your thoughts on Congress taking away future CO-OP funding? Is anything being done to get this funding back?
Well, our response was incredible disappointment. It occurred overnight and without warning. There was no opportunity to weigh-in.
We've come to believe that even a lot of people in Congress were unaware that CO-OPs were part of the cuts and unaware of all of the activities.
At the end of December there were over 40 developers that had applications pending for CO-OPs with the [Centers for Medicare and Medicaid Services] and as of the next evening they were no more. So yeah, we're very disappointed and shocked.
Once that money goes away it's really hard to get it back. What we've done as an organization is asked current CO-OPs to alert and inform their congressional delegations. Because it matters to all the CO-OPs that there are more.
The more, the stronger the group. And for those who had apps pending, we've encouraged them to educate their congressional delegations about what was at stake and there's been some success, and many people in Congress are very upset. Now, to my knowledge there is no current pending bill or funding source identified.
Are there any members of Congress who are particularly friendly to your efforts?
There have been a number of people in Congress who have expressed concern about it. The Senate Finance Committee had a hearing about the exchanges about three weeks ago now ... and there were questions from a number of senators about the CO-OP funding being taken away.
Sen. Bill Nelson [(D)] from Florida asked some tough questions. There were two applications pending out of Florida for approval, and so they're very concerned about it.
And of course the chair of that committee, Max Baucus [(D - Mont.)], asked some questions and said he wanted to get to the bottom of what happened. Representative John Lewis' [(D - Ga.)] office reached out to us and we've been talking with them.
Why are CO-OPs important?
For the very reasons that Congress recognized when they created the program. If you have a closed insurance market, and few very large carriers dominating the market, then that's a real downward pressure on competition and upward pressure on cost. One of the reasons they're so important is to create that competition.
... Another requirement in the law is that they promote integrated care models. They're focused on the consumer and how through the insurance product and the infrastructure they can drive some new care models, like medical homes and incentivizing primary care physicians more to spend more time with patients. There's all kinds of models like these pursued in the CO-OPs.
Who do you envision finding CO-OPs attractive?
They're targeting those who have not been insured, the uninsured. It's very hard for an individual to get insurance if they don't have it - and that goes for small employers, too.
They're targeting people who will be going to the exchanges. They'll all be gearing up to sell on the exchanges in their states and many of them will sell outside of the exchange as well.
We're hoping that all 24 CO-OPs will be ready for the Oct. 1, 2013 open enrollment date on the exchanges. CO-OP approvals rolled out over a period of time.
There were seven CO-OPs that first got approved in March of 2012. Those are the most developed, those are the farthest along in getting ready. The seven first states were Montana, Iowa/Nebraska (one CO-OP serving both), New Jersey, New Mexico, New York, Oregon and Wisconsin. Some of the CO-OPs that were approved most recently, it might be a stretch for them to be ready but they're all making an effort to reach that date.
The CO-OPs are not up and running yet. They basically have to create an entire infrastructure of an insurance company and they're waiting on their licenses.
What do you think is important for brokers to get out of the idea of CO-OPS?
It's a wonderful new option for the people they're helping. It's a great new option and I would be surprised if brokers in the states that they're established don't immediately recognize that.
How are you and NASHCO willing to work with brokers? How can they work with you?
Oh, a number of ways. We are trying to engage in outreach so brokers and all people become aware of this option. A lot of people - including brokers - don't know about them.
Our first goal is to let people know that they're not exchanges and the other is our relationship with brokers. Some of the CO-OPs have made gestures to seek advice from them about product design because they recognize their expertise, and we're very open to feedback from them on everything. We also want to help them learn about us and to make their job easier.
I don't know one CO-OP that has said they're not going to use brokers. But other than seeking feedback, not much has happened yet. The CO-OPs are still waiting for licensing and after that's taken care of you'll start to see [more]. So we'll have a better idea of the exact relationship with brokers once it starts to roll out.
I can say overall and with absolute confidence they recognize the expertise and huge value in the broker community to enrollment efforts and want assistance and to provide an easy path for the brokers to do that. This is totally a new insurance carrier [for the brokers].
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