Created as part of the Patient Protection and Affordable Care Act, co-ops are nonprofit, member-run organizations that will offer health insurance plans on the state exchanges as another option for consumers and businesses. The federal government already has given approval to launch 24 co-ops in 24 states.
In Illinois, the federal government announced a $160-million loan late last year to a hospital trade organization, Metropolitan Chicago Healthcare Council, to establish a health insurance co-op to compete against major insurance carriers in the state.
The Land of Lincoln Health Inc. Co-op’s mission is to provide accessible, high quality health insurance to individuals and small businesses in Illinois. The co-op’s CEO, Dan Yunker, addressed a group of employers during a session presented by the Midwest Business Group on Health last week.
Calling the establishment of the co-op a “Herculean task,” Yunker said MCHC’s board of directors “felt this was an important piece of the legislation and that we [MCHC] were the best organization to ensure a quality co-op came to Illinois. We haven’t totally defined our plan design yet, but we’ll be on the exchange and off the exchange.”
Yunker outlined eight criteria organizations need to succeed in this new health care landscape.
1. The ability to change patient behavior. “This is a big deal. How do we change those behaviors when it’s personal? But it has to happen,” says Yunker. “It also ties into accountability. You all know on the employer side with all the investments in wellness and engagement programs, it’s hard. But we need to do that in a good way, together.”
2. A recognizable brand in the marketplace. “Consumers are going to engage with a brand. We need define what that is, engage them, find out why they have an affinity to a certain thing,” said Yunker. “We need to figure that out if we’re going to try and create a movement. We would love, obviously, for these engagement behaviors to become viral but how do you trigger viral?”
3. The ability to raise capital. “There is a lot of capital already in this but is it aligned appropriately, is it being utilized appropriately and where is it flowing?” asked Yunker. “We’re a co-op; we have to invest back into the co-op or into the delivery of benefits provided to the members of the co-op. That’s a bit unique and the federal government liked our plan and funded it and we believe have the capital to create an option in the marketplace with our various partners.”
4. The ability to aggregate lives. “There’s a lot of questions about this. Who really is going to be purchasing coverage? How far down is it going to get to the consumer making that purchasing decision?” Yunker asked. “I believe that if I’m buying something, I actually have a little bit more ownership in it versus someone buying something for me … there’s some great statistics out there about how much time an American spends buying a new flat-screen TV versus the time they spend filling out their open enrollment paperwork and making the benefits decisions that you made for them. That probably needs to change if we want to engage the consumer.”
5. Effective risk management. “That [risk management] model has to change to where the provider, the employer, the consumer — whatever the purchasing decision is there — and the payer have to work together to manage that risk together,” Yunker said. “Various levels of risk-sharing seem to be where the market is going, and we believe is one of the criteria that has to succeed to solve this issue.”
6. A qualified, large, clinical footprint. “If the consumer’s making a choice, are they actually worried about that broad network?” Yunker asked. “In 45 minutes, in this marketplace, I can get to 53 hospitals. I have a choice. I’m going to two of them. I’ve gone to maybe five doctors. That’s my world. It’s personal. I’m not sure broad is needed anymore, and how do you look at that and change that when the consumer is making the decisions?”
7. The ability to collaboratively pull all the disparate pieces together to form a cohesive, integrated, health plan and health care model.
8. The ability to think disruptively. “In any time of change, this is a must,” said Yunker.
Read more from the MGBH session, “Health Insurance Exchanges and CO-Ops: Public and Private Options,” in EBN inBrief Monday.
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