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What are Consumer Operated and Oriented Plans (CO-OPs)? How are they different from plans in the health insurance exchanges?

Q: What are Consumer Operated and Oriented Plans (CO-OPs)?  How are they different from plans in the health insurance exchanges?

A: The Affordable Care Act (ACA) creates a new type of non-profit health insurer, called a Consumer Operated and Oriented Plan (CO-OP). These insurers are run by their customers through a cooperative model. CO-OPs will offer consumer-friendly, affordable health insurance options to individuals and small businesses. These plans have been established in 24 states through low-interest loans funded by the ACA.

What this means for consumers

By January 1, 2014, individuals will have the opportunity to buy individual and family health insurance coverage from a CO-OP. Small business owners will be able to buy health coverage for their employees from a CO-OP.

In a CO-OP, your health insurance needs and concerns are a top priority because you and your fellow customer/members elect the board of directors. A majority of these directors must themselves be CO-OP customers. CO-OPs must use profits to lower premiums, improve benefits, or improve the quality of members’ health care.

Some important details

  • By January 1, 2014, you may be able to buy a CO-OP health plan through a new competitive health insurance marketplace in your state. You may also be able to buy a CO-OP health plan outside of an exchange.
  • CO-OPs are required to meet the same state and federal quality and financial standards as other health insurance plans.
  • The health care law encourages CO-OP plans to offer better coordination of consumers’ medical care.

Read more FAQs about health reform and health insurance exchanges.

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