Health Care CO-OPs; a Compelling New Option

y Ranee Randby, Communications Director | Community Health Alliance
Beginning January 2014, health insurance in the United States will become mandatory just as car insurance is in many states.

Many factors go into choosing a health insurance plan, depending on your age and life
circumstances. Consumer Operated and Oriented Health Insurance Plans, or
CO-OPs, are a compelling new option under the Affordable Care Act.
Individuals and small businesses that live or operate in a CO-OP state
will have another option to traditional health insurance.
Gone are the pre-existing condition exclusions and arbitrary cancellations;
additionally, dollar limits on coverage will be restricted. More
Americans will have access to health care and will be required to take a
more active role in their health, ushering in a new era for health care
coverage in many ways.

A lot of attention has been given to the Health Insurance Exchanges (now called the
Marketplace), with 26 states choosing the federal government-run online
insurance Marketplace, 17 states electing to run their own and seven
deciding to split the duties in a partnership. But a lesser known – but
equally important – health care revolution is happening in the 23 states
where applications were approved for CO-OPs.

What is a CO-OP?

The CO-OP model was created by a Congressional bipartisan panel under the Affordable Care
Act to promote competition in the health insurance industry. As state
and federally regulated health insurance plans, CO-OPs have a specific
mandate to provide health insurance that is responsive to individuals
and small business needs through fair and effective competition. CO-OPs
will begin member enrollment in 23 states in October 2013 for coverage
effective on Jan. 1, 2014.

“You could say that the traditional insurance company is like a big bank,”
said Jerry Burgess, the president and CEO of the South Carolina and
Tennessee CO-OPs, Consumer’s Choice Health Plan and Community Health
Alliance. “They are managed the same way, with comparable business
goals: to make money, gain market share and avoid losses. A health
insurance CO-OP is nonprofit by definition, so it’s more like a credit
union, with members governing the business and benefitting from the
organization’s success.”

CO-OPs are unlike any other health insurance company. The emphasis is on the consumer. No
traditional health insurance company is governed by its members,
providers and brokers who elect representatives from each group to the
board of directors. A few ways they are different include:
“Member-governance promotes a bottom-up business strategy for managing the plan and
encourages the exchange of ideas and best practices,” said Martin
Hickey, MD, New Mexico Health Connections CEO. “And most importantly,
care, communications and business practices center around the
member/patient – which is different from the traditional health
insurance company model.”

All the approved CO-OPs were funded through loans from the U.S. Department of Health and Human
Services (HSS) to help set up and maintain CO-OP health insurance
issuers. CO-OP loans must be repaid with interest, and
loans have been made only to private, nonprofit entities that
demonstrate a high probability of becoming financially viable. The
Centers for Medicaid and Medicare (CMS, a division of HSS) closely
monitors CO-OPs to ensure they are meeting program milestones. CO-OP
loan recipients are subject to strict monitoring, audits, and reporting
requirements for the length of the loan repayment period plus 10 years.

Approved CO-OPs, their loan amounts and websites:

  • Land of Lincoln Health (incorporated as Metropolitan Chicago Healthcare Council CO-OP), Illinois, $160,154,812
  • Compass Cooperative Health Network, Arizona, $93,313,233
  • Colorado Health Insurance Cooperative, Inc. (CHI), Colorado, $69,396,000
  • HealthyCT, Connecticut, $75,801,000
  • CoOportunity Health (formerly Midwest Members Health), Iowa and Nebraska, $112,612,100
  • Kentucky Health Care Cooperative, Kentucky, $58,831,500
  • Louisiana Health Cooperative, Inc., Louisiana, $65,040,660
  • Maine Community Health Options (MCHO), Maine, $62,100,000
  • Evergreen Health Cooperative Inc., Maryland, $65,450,900
  • Minutemen Health, Inc., Massachusetts, $88,498,080
  • Michigan Consumer’s Healthcare CO-OP, Michigan, $71,534,300
  • Montana Health Cooperative, Montana, $58,138,300
  • Hospitality Health CO-OP, Nevada, $65,925,396
  • Freelancers CO-OP of New Jersey, New Jersey, $107,213,300
  • New Mexico Health Connections, New Mexico, $70,364,500,
  • Freelancers Health Service Corporation, New York, $174,445,000
  • Coordinated Health Plans of Ohio, Inc., Ohio, $129,225,604,­ website under construction
  • Freelancers CO-OP of Oregon, Oregon, $59,487,500
  • Oregon’s Health CO-OP (Incorporated as Community Care of Oregon), Oregon, $56,656,900
  • Consumers’ Choice Health Insurance Company, South Carolina, $87,578,208
  • Community Health Alliance Mutual Insurance Company, Tennessee, $73,306,700
  • Arches Community Health Care (AHC or Arches), Utah, $85,400,303
  • Common Ground Healthcare Cooperative, Wisconsin, $56,416,600
  • Vermont Health CO-OP, Vermont,$33,837,800


CHA is Tennessee’s health insurance CO-OP. For more information, visit or call 888-415.3332. Ranee Randby may be reached directly at