R u c h i t a P e n d s e M e n t o r : D r. S c o t t H a r r i n g t o n
Early Performance of ACA’s Health Insurance Cooperatives
August 14, 2014 SUMR Program Symposium
The ACA and the CO-OP Program
• ACA sought to cut uninsured population
• Health Insurance Exchanges
• Lack of choice and competition in individual and small group
markets
• Debate over public option
• CO-OP: Consumer Operated and Oriented Plan
• Non-profit companies
• Governed by policy holders
• New- not affiliated with existing insurance providers or any kind of
government body
Co-op Funding
• Federal government has invested a lot in coops
• Originally, $6 billion federal fund created
• 2012: Nearly $2 billion awarded to 24 new companies
• 2013: Only about $200 million uncommitted funds
survived cuts
• Two types of loans
• Startup loans: repaid within 5 years
• Solvency grants: repaid within 15 years
Uncertainty about Co-op Success
• Vermont Health Co-op failed to get licensed
• CMS itself predicted over 35% default rate
• Forced to set premiums without historical
claims data
• What will happen to premiums in 2015?
Our Analysis
• Find as much data as possible on these co-ops
• Look at key indicators of financial health
• Compare CO-OPs to other companies
• Market share
• Premiums
0 5 10 15 20 25
Meritus Mutual Health Partners (AZ)
Colorado Health Insurance Coopera=ve, Inc. (CO)
HealthyCT, Inc. (CT)
Land of Lincoln Mutual Health Insurance Company (IL)
CoOportunity Health (IA/NE)
Kentucky Health Coopera=ve, Inc. (KY)
Louisiana Health Coopera=ve Inc. (LA)
Maine Community Health Op=ons (ME)
Evergreen Health Coopera=ve Inc. (MD)
Minuteman Health, Inc. (MA)
Consumers Mutual Insurance of Michigan (MI)
Montana Health Coopera=ve (MT)
Nevada Health CO-‐OP (NV)
Freelancers CO-‐OP of New Jersey, Inc. (NJ)
New Mexico Health Connec=ons (NM)
Freelancers Health Service Corpora=on (NY)
Coordinated Health Mutual, Inc. (OH)
Freelancers CO-‐OP of Oregon, Inc. (OR)
Oregon's Health CO-‐OP (OR)
Consumers' Choice Health Insurance Company (SC)
Community Health Alliance Mutual Insurance Company (TN)
Arches Mutual Insurance Company (UT)
Common Ground Healthcare Coopera=ve (WI)
Millions of Dollars
Borrowed Money by Plan
Borrowed Money 2014 Q1
Borrowed Money 2013 Y
0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%
Meritus Mutual Health Partners (AZ)
Colorado Health Insurance Coopera=ve, Inc. (CO)
HealthyCT, Inc. (CT)
Land of Lincoln Mutual Health Insurance Company (IL)
CoOportunity Health (IA/NE)
Kentucky Health Coopera=ve, Inc. (KY)
Louisiana Health Coopera=ve Inc. (LA)
Maine Community Health Op=ons (ME)
Evergreen Health Coopera=ve Inc. (MD)
Minuteman Health, Inc. (MA)
Consumers Mutual Insurance of Michigan (MI)
Montana Health Coopera=ve (MT)
Nevada Health CO-‐OP (NV)
Freelancers COOP of New Jersey, Inc. (NJ)
New Mexico Health Connec=ons (NM)
Freelancers Health Service Corpora=on (NY)
Coordinated Health Mutual, Inc. (OH)
Freelancers COOP of Oregon, Inc. (OR)
Oregon's Health CO-‐OP (OR)
Consumers' Choice Health Insurance Company (SC)
Community Health Alliance Mutual Insurance Company (TN)
Arches Mutual Insurance Company (UT)
Common Ground Healthcare Coopera=ve (WI)
Average
Money Owed/Assets
0% 200% 400% 600% 800% 1000% 1200% 1400%
Meritus Mutual Health Partners (AZ)
Colorado Health Insurance Coopera=ve, Inc. (CO)
HealthyCT, Inc. (CT)
Land of Lincoln Mutual Health Insurance Company (IL)
CoOportunity Health (IA/NE)
Kentucky Health Coopera=ve, Inc. (KY)
Louisiana Health Coopera=ve Inc. (LA)
Maine Community Health Op=ons (ME)
Evergreen Health Coopera=ve Inc. (MD)
Minuteman Health, Inc. (MA)
Consumers Mutual Insurance of Michigan (MI)
Montana Health Coopera=ve (MT)
Nevada Health CO-‐OP (NV)
Freelancers CO-‐OP of New Jersey, Inc. (NJ)
New Mexico Health Connec=ons (NM)
Freelancers Health Service Corpora=on (NY)
Coordinated Health Mutual, Inc. (OH)
Freelancers CO-‐OP of Oregon, Inc. (OR)
Oregon's Health CO-‐OP (OR)
Consumers' Choice Health Insurance Company (SC)
Community Health Alliance Mutual Insurance Company (TN)
Arches Mutual Insurance Company (UT)
Common Ground Healthcare Coopera=ve (WI)
Combined Ra:o
Claim and CAE Ra=o
Expense Ra=o
0 20 40 60 80 100 120
Meritus Mutual Health Partners (AZ)
Colorado Health Insurance Coopera=ve, Inc. (CO)
HealthyCT, Inc. (CT)
Land of Lincoln Mutual Health Insurance Company (IL)
CoOportunity Health (IA/NE)
Kentucky Health Coopera=ve, Inc. (KY)
Louisiana Health Coopera=ve Inc. (LA)
Maine Community Health Op=ons (ME)
Evergreen Health Coopera=ve Inc. (MD)
Minuteman Health, Inc. (MA)
Consumers Mutual Insurance of Michigan (MI)
Montana Health Coopera=ve (MT)
Nevada Health CO-‐OP (NV)
Freelancers CO-‐OP of New Jersey, Inc. (NJ)
New Mexico Health Connec=ons (NM)
Freelancers Health Service Corpora=on (NY)
Coordinated Health Mutual, Inc. (OH)
Freelancers CO-‐OP of Oregon, Inc. (OR)
Oregon's Health CO-‐OP (OR)
Consumers' Choice Health Insurance Company (SC)
Community Health Alliance Mutual Insurance Company (TN)
Arches Mutual Insurance Company (UT)
Common Ground Healthcare Coopera=ve (WI)
Enrollees (Thousands)
Expected vs. Actual Enrollment by Plan
Actual
Revised
Expected Enrollment
0% 20% 40% 60% 80% 100% 120%
AZ
CO
CT
IL
IA
NE
KY
LA
ME
MD
MA
MI
MT
NV
NJ
NM
NY
OH
OR
SC
TN
UT
WI
Total
Co-‐op Enrollment % of all Exchange Enrollees
-‐40%
-‐20%
0%
20%
40%
60%
80%
AZ CO CT IA IL KY LA MA MD ME MI MT NE NJ NM NV NY OH OR SC TN UT WI Total
Premiums of Co-‐Ops Rela:ve to Non-‐Coops by State
0
20
40
60
80
100
120
-‐40% -‐20% 0% 20% 40% 60% 80%
Percen
t of M
arketplace Plans Selected as Co-‐Ops
Rela:ve Premiums of Co-‐ops in State
Exchange Market Share by Rela:ve Premiums
-‐25.0%
-‐20.0%
-‐15.0%
-‐10.0%
-‐5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
0 20 40 60 80 100 120
Prop
osed
2015 Ra
te Cha
nge %
Exchange Share %
Rate Change % vs. Exchange Share %
R² = 0.60
-‐25%
-‐20%
-‐15%
-‐10%
-‐5%
0%
5%
10%
15%
20%
-‐40% -‐20% 0% 20% 40% 60% 80%
Prop
osed
2015 Ra
te Cha
nge %
2014 Rela:ve Premium
2015 Rate Change % vs. Rela:ve Premiums %
Takeaways
• CO-OP portion of ACA, how cooperatives work
• Literature search
• Finance and accounting terms and concepts
• Data
• Statistical analysis
Acknowledgements
• Dr. Scott Harrington
• Dr. Andy Coopersmith and Wharton Public Policy
Initiative
• Joanne Levy and the SUMR Program
• Leonard Davis Institute