August 10, 2010; Source: Maryland Reporter| Remember the provisions in national health care reform that allowed for insurance cooperatives in place of the “public option?” In Maryland, a nonprofit co-op—the Maryland Nonprofit Health Insurance Co-op—is conducting a feasibility study to see if it can start its own insurance carrier targeting adults between 19 and 64 living along the I-95 corridor.
The co-op steering group, which includes the Howard County health office, the president of Baltimore Health Care Access, and others, hopes to make a decision by next July. Why create a new entity? Because between the wealthy people who can afford health insurance, the seniors who will be covered by Medicare, and the poor who will be eligible for deep subsidies, “working class families are still going to have a hard time affording health insurance,” according to the chair of the co-op’s steering committee.
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This Maryland effort is looking to apply for foundation funding to complete the feasibility analysis, but it is unlikely that a foundation is going to put up the money to capitalize a new co-op (the Maryland co-op would need $100 million to $150 million in reserves at the start with an enrollment of 50,000 to 100,000 people to be economically viable), so the plan would include tapping the $6 billion in the health reform bill earmarked as start-up grants for statewide nonprofit health co-ops.
The issue may not be whether a nonprofit can be formed to deliver health insurance. The challenge may instead be whether it could come together fast enough and at a large enough scale to be economically viable as health reform begins implementation in the next few years.—Rick Cohen