Health CO-OPs: Driving Choices Up, Costs Down for Small Businesses

Terry Gardiner

Original statement issued on February 21, 2012:

Small businesses in eight states received good news today with the announcement that organizations in their state will be receiving funds to help create new consumer-run health insurance plans that will lower their costs and increase their insurance choices.

These new plans, called Consumer Oriented and Operated Plans, will bring nonprofit insurers to the healthcare market, promoting competition that helps control the price of coverage. Created by the Affordable Care Act, nonprofit CO-OPs are required to use their profits to lower premiums, improve quality and expand benefits or enrollment.

CO-OPs can choose to offer plans through new competitive marketplaces—called health insurance exchanges—that are required to be running in all states by Jan. 1, 2014. Our national opinion polling found one-third of small employers who currently do not offer insurance would be more likely to do so because of the exchanges. CO-OPs will play a role in creating competition both inside and outside the exchanges, which is why the goal is to establish them in every state.

Small businesses that are struggling with soaring coverage costs and diminished plan choice need financial relief from these burdens. By pursing the establishment of health insurance CO-OPs, states can help bring down those costs for small businesses, better positioning them to grow and hire.