Cooperating for better care.

Peter Beilenson

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Big health co-op collapses

Regulators have ordered Health Republic Insurance of New York, the biggest nonprofit health insurer spawned by the Affordable Care Act, to shut down as it moves toward insolvency. This will be disrupt  coverage for more than 200,000 New York state residents and is the fourth such co-op to collapse in recent months.

Federal and state regulators have been working together to keep these new organizations going in the face of the fact that most are losing a lot of money.

The Washington Post reported that “Because each co-op exists in a different state and different health insurance climate, Health Republic’s collapse is not a harbinger for all the rest, said Peter Beilenson, chief executive of Evergreen Health Cooperative, in Maryland. Still, he told The Post, “{I]t clearly is not good for the [co-op] program, because it is the biggest one, and it’s obviously going to get a lot of attention.”

“Beilenson said that Health Republic’s failure shows that federal health officials should make it easier for the co-ops to raise outside capital, which some need if they’re going to last long enough for them to become financially stable.”

A new little co-op takes on a behemoth insurer


“David and Goliath (1599) oil painting by Caravaggio.

Herewith the story of Evergreen Health Cooperative, created under the federal Affordable Care Act to offer “patient-centered” care and cut healthcare-market costs. (We keep being slightly amused by term ”patient-centered” care. Isn’t that  the population that healthcare was always suppose to be centered on? Well, maybe not….Follow the money?)

Evergreen has two parts: a nonprofit insurance company with a traditional network of doctors and a health system that directly employs providers.

“We’re the first new commercial insurer in 20 years in Maryland as far as we know,” Peter Beilenson, M.D., a former Baltimore health commissioner, told The Baltimore Sun. “It’s not easy to have a successful startup in a state that basically has a monopoly,”  citing  CareFirst BlueCross BlueShield, Maryland’s dominant insurer.

Evergreen is one of 24 such co-ops in America, officially called Consumer Operated and Oriented Plans, and, as The Sun noted, ”many of them face similar behemoths.”

And the ACA doesn’t let these co-ops do traditional marketing. Further, government rules  make  it hard to sign up large employers that could bring  in many paying customers at once.
”That fierce competition {from big insurers} is the biggest hurdle to the co-ops’ success …. But there are a host of other potential stumbling blocks, including name recognition and funding, and the co-ops are responding by boosting their industry knowledge, aggressively marketing their services and cutting premium prices to lure customers, ” reports The Sun.

Evergreen looks to small businesses that it could attract on its own and enroll in groups. ”So far, about 1,000 small businesses employing {a total of} about 12,000 people have switched to the co-op.”

Research ”shows those insurers that follow the {co-op} model could save around 20 percent on hospitalizations alone, one of their biggest costs.”

We wonder how some of these co-ops might be integrated with Federally Qualified Health Centers.




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