Will there be CO-OP Mutual Health Insurance Non-profits in Oregon’s future – and why should you care?

The Patient Protection and Affordable Care Act of 2010 made Consumer Operated and Oriented Plans (CO-OPs) available throughout the nation beginning 2014.  CO-OPs are member-oriented health plans with member-based boards, acting as true nonprofits.  CO-OPs will serve individuals and employers interested in offering their employees health insurance.  If there’s any hope that we will see real choice among insurers and real competition within the health insurance market,  that hope resides with the new CO-OPs. 

CO-OPs must offer coverage through state health insurance exchanges, according to federal law. The exchange will allow individuals and small businesses to purchase health insurance electronically, and expect to drive down rates, making insurance more affordable by having a large group of purchasers.

All things being equal, CO-Ops should be able to offer health insurance to its members for 20-30% less than typical private health insurance companies. Why the difference?  CO-OPs will be true nonprofits run by member-directors who don’t have to meet shareholder expectations, and CO-OPs should be run with lower administrative costs, lower executive salaries (we hope) and lower advertising budgets.