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August 30, 2011updated 13 Apr 2017 8:47am

Putting health insurance in the hands of the American consumer

As a key step towards this objective, the CMS has taken steps to encourage creation of new private non-profit, consumer-governed health insurance plans that will give consumers and small businesses additional affordable health insurance choices

By LII editorial

If the Federal Centres for Medicare & Medicare Services (CMS) in the US has its way, competition in the country’s health insurance market is set to increase.

As a key step towards this objective, the CMS has taken steps to encourage creation of new private non-profit, consumer-governed health insurance plans that will give consumers and small businesses additional affordable health insurance choices.

The CMS terms the new health insurance organisations consumer operated and oriented plans, or CO-OPs.

“CO-OPs will provide consumers more choices, greater plan accountability, and help ensure a more competitive insurance market,” said Steve Larsen, director of the centre for consumer information and insurance oversight.

CO-OPs that meet standards laid down by the CMS will qualify to participate in a $3.8bn loan programme designed to assistance them with start-up and capitalisation costs.

The CMS has specified that all loans must be repaid with interest and loans will only be made to private, non-profit entities that demonstrate a high probability of becoming financially viable. According to the CMS, several successful health insurance cooperatives currently exist in the US, covering nearly 2m individuals.

“A number of diverse groups are organising to take advantage of this new opportunity,” noted the CMS.

“In one state, primary care providers are working to create a CO-OP to focus on care for rural areas.

“In another, a CO-OP steering committee has been formed by interested physicians, technology and business experts, and community groups.”

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