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- Most health care cooperatives have failed since 2013
- If the Affordable Care Act is repelled – there may be no co-ops
- Only a few health insurance cooperatives remain intact
- The Affordable Care Act created the health care co-ops
What’s a health insurance cooperative? It’s becoming a popular question because co-ops are popping up everywhere. You may have a cooperative at your local farmer’s market or maybe even your child’s nursery.
If so, you’re familiar with what it means. Now just imagine it being applied to your healthcare. The information provided here will help you understand exactly what a health cooperative is and what it can do for you.
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Who owns a health insurance cooperative?
The Affordable Care Act required the establishment of a Consumer Operated and Oriented Plan (CO-OP). The job of a co-op is to foster the creation of nonprofit health insurance issuers who will then offer competitive health plans in the individual and small markets.
A non-profit organization owns a medical insurance cooperative wherein the people who own the company are also insured by the enterprise.
A health insurance cooperative can be formed nationally, at the state level, or even locally. A cooperative can include many individuals including doctors, business owners, hospitals, and others. Co-ops offer health insurance through the marketplace.
Why are health insurance cooperatives rising in popularity?
Health insurance cooperatives are becoming more popular because health care costs are continuing to rise. When people can’t afford to buy medical insurance through traditional means, they look for alternate ways to be covered.
For instance, individuals who are self-employed and struggling to cover their health insurance costs may opt to participate in a health cooperative to continue to be covered.
How does a health insurance cooperative work?
When someone becomes a member of a health insurance cooperative, they will pay a monthly membership fee. The range for prices varies between $40 and $90. The membership fee includes access to dentists, doctors, and even prescription drug discounts. When compared to the average COBRA plan cost, about $650, a health insurance cooperative is much more affordable.
Co-ops were created by the Affordable Care Act and also the establishment of a 15-member Advisory Board. The board is responsible for making recommendations to the Secretary of Health and Human Services.
It’s the Secretary of Health and Human Services’ responsibility to help the Secretary and Congress foster the creation of nonprofit health insurance carriers. Co-ops are governed by the Federal Advisory Committee Act (FACA), which is a federal law. The law dictates the behavior of all federal advisory committees, which includes the co-op program.
Cons Associated with a Health Care Cooperative
Although there are a ton of pros associated with a health care cooperative, there are a few cons as well. The biggest downfall is that co-op. does not usually cover hospital visits But, if you need to access one, there are a few hospitals that participate. The cooperatives have also had a hard time being successful.
In 2013, there were 23 co-ops created. At the beginning of 2016, only 11 health insurance cooperatives were still operational. By mid-year 2016, there were only seven co-ops still in operation.
In 2017, the year started with just five cooperatives in business. Several politicians believe an overhaul could revive the programs in 2018, but there are no promises.
What caused co-ops to fail?
Another reason for the failure was benefits that were too generous. Enrollees were also sicker than anyone anticipated. Due to competition, smaller carriers with larger reserves also made it harder for the little guys to thrive.
Trump’s Presidency Makes Co-Ops Weary for the Future
After President Trump had been elected, it became evident that co-ops either needed to be revamped or shut down completely. It’s unclear whether health insurance co-operatives can be modified to be successful for everyone involved.
If an alternative to the Affordable Care Act is enacted by Trump’s presidency, it is likely that cooperatives may never make a comeback.
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