CMS releases proposed rule for health insurance co-ops

Even though considerable doubts surround the survival prospects of these co-ops, they are envisioned as a means to give consumers better value than existing insurance companies. Start-up loans will be available to co-ops that have good odds of becoming financially viable.

Modern Healthcare: CMS Releases Proposed Insurance Co-Op Rules
Proposed rules governing the creation of co-ops, or private not-for-profit insurers created by Patient Protection and Affordable Care Act, were issued Monday by the CMS. The proposed co-ops will be funded through $3.8 billion in government loans and governed by consumers, according to the proposed rules. Co-ops would qualify for start-up loans if they have a high probability of becoming financially viable, which the CMS will determine based on evaluations of their legal, operational and business plans, according to Richard Popper, director of the Office of Insurance Programs at the CMS (Daly, 7/18).

CQ HealthBeat: HHS Launches Co-op Rulemaking, Financing Amid Doubts About Their Survival
The Centers for Medicare and Medicaid Services on Monday released a 56-page proposed rule that aims to help launch new consumer-oriented health plans in every state. These cooperative plans are supposed to give customers better value for their dollar than existing for-profit insurance companies. Within days, CMS also expects to announce the availability of $600 million in loans to help start the "consumer operated and oriented plans" (CO-OPs), along with another $3.2 billion to help keep them solvent. Officials estimated that roughly 57 entities could be funded with the $3.8 billion, but they cautioned against assuming that would be the final number. They said actual loan amounts will depend on the size of plans and how much risk they are willing to take on (Reichard, 7/18).

The Hill: HHS To Loan $4B For Health Co-Ops, Says One-Third Might Default
The Obama administration on Monday rolled out nearly $4 billion in loans for a program established by the health care reform law, but said roughly one-third of those loans could end in default. The loans will help establish insurance co-ops, a nonprofit model created by the reform law. The Health and Human Services Department on Monday released the first proposed regulation for co-ops (Baker, 7/18).

Politico Pro: Would-Be Co-Ops Weigh Possibility, Problems
Nonprofit, consumer-run health plans lack the national scope and leverage that some hoped would accompany a public option, but policymakers are trying to use the entities, funded by the Affordable Care Act, to provide much-needed competition. CCIIO Director Steve Larsen unveiled federal regulations for the program on Monday at the first meeting of the National Alliance of State Health Cooperatives in Washington, where about 80 stakeholders from all across the country were eager for the guidance. "The CO-OPs will be free to adopt innovative delivery and payment models," Larsen said, adding they could "play a vital role" in bringing affordable health care to the small-business market in particular (Norman and Feder, 7/19).

Kaiser Health News: HHS Sets Rules For Consumer-Controlled Health Plans
New consumer-controlled health insurance plans could get seed money from the government to increase competition - and maybe cut prices - under new rules announced Monday by the Department of Health and Human Services (Weaver, 7/18).