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Consumer Operated and Oriented Plans insurers will provide more health plan options for individuals and small businesses, officials from the Centers for Medicare and Medicaid Services said.
The new insurers “will provide consumers more choices [and] greater plan accountability, and help ensure a more competitive insurance market,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the CMS, said during a press briefing to announce the proposed rule on CO-OPs. He added that he hopes CO-OPs will provide affordable options for small businesses that often pay up to 18% more in health care costs than do large businesses.
Although plans created under the CO-OP program will have requirements similar to those of plans offered through state exchanges, CO-OP plans will be required to use any profits they make to lower premiums, improve the quality of care, or improve benefits available to consumers.
In addition, CO-OP plans will be governed by a board composed chiefly of plan members elected by their peers, and enrollees will have the opportunity to help decide the direction of health plans. CO-OPs will also be required to tailor two-thirds of their plans to serve either individuals or small businesses.
The CMS will issue $3.8 billion in start-up and capital loans for CO-OP insurers, and will evaluate potential insurers for their financial viability to ensure that they will be able to turn a profit.
Despite opportunity for consumer benefits, the CMS is also bracing for potential costs, including default on the loans. According to the proposed rule, the CMS estimates that 35% of solvency loans and 40% of start-up loans may not be repaid. The rule also states that the CMS estimates spending $600 million for start-up loans and $3.2 million for solvency loans. Start-up loans must be repaid in 5 years, and capital, or solvency, loans must be paid in 15 years. However, Mr. Larsen said those estimates are “conservative,” and the actual expectation is a much lower rate of default.
The agency will be pushing to have a CO-OP available in every state; so far, it estimates that 57 entities will participate in the program.
Rhode Island and Texas have announced that they plan to have a CO-OP available. Existing health CO-OPs include Puget Sound Health CO-OP in Washington and the Health Partners CO-OP that operates in Wisconsin and Minnesota.
Consumer Operated and Oriented Plans insurers will provide more health plan options for individuals and small businesses, officials from the Centers for Medicare and Medicaid Services said.
The new insurers “will provide consumers more choices [and] greater plan accountability, and help ensure a more competitive insurance market,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the CMS, said during a press briefing to announce the proposed rule on CO-OPs. He added that he hopes CO-OPs will provide affordable options for small businesses that often pay up to 18% more in health care costs than do large businesses.
Although plans created under the CO-OP program will have requirements similar to those of plans offered through state exchanges, CO-OP plans will be required to use any profits they make to lower premiums, improve the quality of care, or improve benefits available to consumers.
In addition, CO-OP plans will be governed by a board composed chiefly of plan members elected by their peers, and enrollees will have the opportunity to help decide the direction of health plans. CO-OPs will also be required to tailor two-thirds of their plans to serve either individuals or small businesses.
The CMS will issue $3.8 billion in start-up and capital loans for CO-OP insurers, and will evaluate potential insurers for their financial viability to ensure that they will be able to turn a profit.
Despite opportunity for consumer benefits, the CMS is also bracing for potential costs, including default on the loans. According to the proposed rule, the CMS estimates that 35% of solvency loans and 40% of start-up loans may not be repaid. The rule also states that the CMS estimates spending $600 million for start-up loans and $3.2 million for solvency loans. Start-up loans must be repaid in 5 years, and capital, or solvency, loans must be paid in 15 years. However, Mr. Larsen said those estimates are “conservative,” and the actual expectation is a much lower rate of default.
The agency will be pushing to have a CO-OP available in every state; so far, it estimates that 57 entities will participate in the program.
Rhode Island and Texas have announced that they plan to have a CO-OP available. Existing health CO-OPs include Puget Sound Health CO-OP in Washington and the Health Partners CO-OP that operates in Wisconsin and Minnesota.
Consumer Operated and Oriented Plans insurers will provide more health plan options for individuals and small businesses, officials from the Centers for Medicare and Medicaid Services said.
The new insurers “will provide consumers more choices [and] greater plan accountability, and help ensure a more competitive insurance market,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the CMS, said during a press briefing to announce the proposed rule on CO-OPs. He added that he hopes CO-OPs will provide affordable options for small businesses that often pay up to 18% more in health care costs than do large businesses.
Although plans created under the CO-OP program will have requirements similar to those of plans offered through state exchanges, CO-OP plans will be required to use any profits they make to lower premiums, improve the quality of care, or improve benefits available to consumers.
In addition, CO-OP plans will be governed by a board composed chiefly of plan members elected by their peers, and enrollees will have the opportunity to help decide the direction of health plans. CO-OPs will also be required to tailor two-thirds of their plans to serve either individuals or small businesses.
The CMS will issue $3.8 billion in start-up and capital loans for CO-OP insurers, and will evaluate potential insurers for their financial viability to ensure that they will be able to turn a profit.
Despite opportunity for consumer benefits, the CMS is also bracing for potential costs, including default on the loans. According to the proposed rule, the CMS estimates that 35% of solvency loans and 40% of start-up loans may not be repaid. The rule also states that the CMS estimates spending $600 million for start-up loans and $3.2 million for solvency loans. Start-up loans must be repaid in 5 years, and capital, or solvency, loans must be paid in 15 years. However, Mr. Larsen said those estimates are “conservative,” and the actual expectation is a much lower rate of default.
The agency will be pushing to have a CO-OP available in every state; so far, it estimates that 57 entities will participate in the program.
Rhode Island and Texas have announced that they plan to have a CO-OP available. Existing health CO-OPs include Puget Sound Health CO-OP in Washington and the Health Partners CO-OP that operates in Wisconsin and Minnesota.