Health Center Federal Policy

As CO-OPs Falter, Congress Ramps Up the Scrutiny

By Michaela Keller

Health policy watchers on Capitol Hill last week took notice as Congress turned its focus to the country’s system of “CO-OPs,” or “Consumer Operated and Oriented Plans.” For those not familiar with this term, the Affordable Care Act (ACA) created a new program to provide loans to help launch new consumer-governed, nonprofit health insurance issuers, referred to as CO-OPs. Congress created the CO-OP program to provide additional health insurance options for consumers, with the hope that increased competition in the state insurance markets would keep premium costs low.

Unfortunately, increased attention from lawmakers last week came as many of the CO-OPs were not performing as expected, including several that recently decided to close due to low enrollment numbers and financial distress. Of the 23 CO-OPs that were created as a result of the ACA, 12 announced that they will no longer offer coverage next year. Individuals who signed up for health insurance through one of the recently closed CO-OP plans will now have to find new health insurance coverage, possibly with higher premium costs.

Last Tuesday, Senators Orrin Hatch (R-UT) and Lamar Alexander (R-TN) sent a letter to the Centers for Medicare and Medicaid Services (CMS), asking the agency to respond to a number of their concerns, including the financial capability and administration of the CO-OP program. This letter preceded two scheduled hearings in the House, the first held by the Ways and Means Health Subcommittee and the second conducted by the Energy and Commerce Oversight and Investigations Subcommittee. Both hearings examined some of the underperforming CO-OPs and what sort of oversight and guidance may be necessary to closely monitor those that remain. As expected, criticism was divided along party lines, with Republicans accusing the administration of creating a fundamentally flawed program that wastes taxpayer money and Democrats countering that budget cuts crippled the program from the start.

It was evident that with an uncertain future, Congress will look to keep a close eye on the CO-OP program and we will likely hear more in the coming weeks and months.