T he Consumer Operated and Oriented Plan (CO-OP) program was established under the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended). The purpose of the program is to foster the creation of CO-OPs—nonprofit, member-run health insurance issuers that sell health plans in states in which they are licensed. The CO-OP program is intended to increase competition and improve choice in private health insurance markets. The Centers for Medicare & Medicaid Services (CMS), which administers the CO-OP program, has awarded loans to 24 CO-OPs since 2012. One of the 24 was unable to secure a state license to operate and was dropped from the program prior to offering coverage. CMS awarded about $2.4 billion to the remaining 23 CO-OPs. Seven of the 23 CO-OPs are operational as of the date of this report. The fact that more than half of the CO-OPs have failed has prompted questions about the program's design, administration, and funding and about the operations of the CO-OPs. In addition, the report provides information about the loan amounts awarded and the current operating status of the CO-OPs. in this report.) CMS has awarded loans to 24 CO-OPs. The other 16 CO-OPs (of the 23 that ever offered health plans) are considered non-operational, which means either they are not offering health plans in 2016 or there is an indication that they will not renew or offer health plans in the future.
The Consumer Operated and Oriented Plan (CO-OP) program was included in the Patient Protection and Affordable Care Act (ACA; P.L. 111-148) in an effort to increase the competitiveness of state health insurance markets and improve choice. Under the program, the Centers for Medicare & Medicaid Services (CMS) uses appropriated funds to award low-interest loans to organizations applying to become CO-OPs—nonprofit, member-run health insurance issuers that sell health insurance in the state(s) in which they are licensed.
CMS awarded loans to 24 CO-OPs. One of the 24 CO-OPs was dropped from the program prior to offering health plans. Among the remaining 23 CO-OPs, 7 are considered operational—meaning they are offering health plans and there is no indication that they will stop doing so in the future—as of the date of this report. The other 16 CO-OPs offered health plans at one time but are currently in various stages of shutting down. CMS awarded about $2.4 billion to the 23 CO-OPs that ever offered health plans.
The fact that more than half of the CO-OPs have ceased operations has generated a lot of interest in the program. The purpose of this report is to address frequently asked questions about the CO-OP program. The report includes information about the structure of the CO-OP program, program requirements, the loan awards, and the current operating status of the CO-OPs.