February 16, 2014; The Republic

For national affordable health insurance to work in terms of keeping prices down and expanding options for customers, there has to be a means of challenging the health insurance monopolies and oligopolies that exist in many states. In New Hampshire, the for-profit health insurance network offering insurance to Granite State residents is Anthem Blue Cross Blue Shield. A for-profit monopolist operating in New Hampshire and Maine, Anthem has been under some criticism for its limited choices in hospital treatment.

For example, a resident of New Hampshire living near the Maine border might want to go to Frisbie Memorial Hospital in Rochester or Portsmouth Regional, but they are not approved providers in the Anthem package. If that person lived in Maine, however, there are plans from a nonprofit CO-OP—Maine Community Health Options—that include four New Hampshire hospitals, including Frisbie and Portsmouth Regional, offered on the Maine exchange.

According to Kevin Lewis, the CEO of Maine Community Health Options, it was important that customers in Maine have access to hospitals in New Hampshire on the Maine/New Hampshire border. There is even another provider offered on the Maine exchange, but Anthem is the only option in New Hampshire. In Maine, 80 percent of residents who have signed up for insurance on the exchange have chosen the CO-OP’s plans, according to Lewis.

The need for competition explains the creation of these nonprofit health insurance co-operatives under the Affordable Care Act. According to the trade association of these relatively new insurers, the National Alliance of State Health CO-OPs (NASHCO), insurance premium prices are coming down in areas where the nonprofit co-ops are able to compete. NASHCO says that 250,000 individuals, families, and employers have signed up for health insurance with the CO-OPs, including 50,000 in the co-op serving Iowa and Nebraska.

The key for co-operative health insurance plans is not only that they attract a large number of enrollees, but that they get hospitals to agree to join their networks. In New York, for example, Stony Brook Hospital struck a deal to accept Health Republic Insurance, the only one of eight insurance providers on the Suffolk County exchange that is a nonprofit CO-OP.

Twenty-three nonprofit health insurance co-operatives in the U.S. operate under the aegis of the Affordable Care Act. The jury is still out on whether these startups will be able to develop the scale of provider networks and members to compete against the gargantuan firms that dominate the insurance market in most states.—Rick Cohen