The federal Affordable Care Act creates a new type of private nonprofit health insurer, called a Consumer Operated and Oriented Plan, or CO-OP. CO-OPs are directed by their customers and designed to offer individuals and small businesses more affordable, consumer-friendly, and high-quality health insurance options. In Maine, a sizable financial loan package has already been awarded to create a CO-OP, to begin offering health insurance in January 2014.
Maine’s CO-OP will be created by Maine Community Health Options, which has been awarded financing of $62.1 million. Kevin Lewis, the CEO at MCHO, will hold an information session at 7 p.m. Tuesday, Oct. 9, at the Camden Public Library to explain what the health insurance CO-OP will offer and how it fits into the structure of the Affordable Care Act and Maine’s current health system.
Lewis’s appearance is part of the library’s “Red White and Green October” speaker series, highlighting topics of interest in the upcoming election. The Affordable Care Act, often called Obamacare, is a complex issue with programs that take effect immediately and others, such as health insurance CO-OPs, which will take effect progressively over several years.
“The development of MCHO as a CO-OP couldn’t come soon enough,” said Jim Davis, MCHO board president and CEO of Pines Health Services in Caribou. “Health care is the fastest growing expense category for Maine’s families and small businesses. The high cost of health care adversely impacts our state’s economy, business growth and family security.”
“MCHO will deliver lower cost and greater stability of premium pricing for Maine’s individual and small group markets,” said Lewis, “through our attention to providing the right care at the right time in the right place, as well as highly efficient administrative functioning. This is a tremendous win for the people and the small businesses of Maine and presents the opportunity to put people first.”
MCHO will be subscriber-owned and governed, ensuring that the interests of Maine people and its local economy drive the plan’s operations, not the interests of for-profit investors. “Maine has a tradition of developing a number of insurance options that have benefitted businesses and individuals, including mutual insurance companies that have stepped in to provide relief for the Maine economy,” said Lewis. “The cooperative models assign the use profits to benefit enrollees, which can be achieved through lowering premiums, improving health benefits, or performing other activities to increase the stability of coverage for CO-OP members.”
To date, 19 other organizations covering 19 states have received loans through the CO-OP program, including organizations in Massachusetts, Connecticut, and Vermont. Much like a mutual insurance company, the CO-OP is governed by its subscribers with the purpose of returning value back to the subscribers and premium payers. The CO-OP program offers low-interest loans to eligible nonprofit groups to help set up and maintain these issuers. The loans are only made to private, nonprofit entities that demonstrate a high probability of financial viability.
MCHO focuses on reducing total health care costs while improving the health outcomes of plan subscribers. Moreover, the Maine CO-OP will bring economic benefits to the state, as it will employ over 100 Maine residents who will help ensure the highest performance rating of the plan in relation to both the subscriber and provider experience.