CO-OPs Have Generally Higher Premiums, Atlantic Information Services Analysis Finds; Could Pose Challenge in Attracting Members

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On average, CO-OP premiums are higher than their competitors across most tiers, according to Atlantic Information Services analysis appearing in the Nov. 4 issue of AIS’s Health Reform Week.

Products offered by the new Consumer Operated and Oriented Plans (CO-OPs) on the insurance exchanges are generally higher priced than those offered by more experienced health plans across all tiers (except platinum), according to Atlantic Information Services, Inc. (AIS) analysis in the Nov. 4 issue of AIS’s Health Reform Week (HRW) — a situation that will make the CO-OPs’ task of attracting members more challenging, says one insurance market expert. CO-OPs are operating in 22 exchanges.

AIS compared premium rates for a 27-year-old individual in 17 federally facilitated or partnership exchanges, and rates for a 40-year-old in four state-run exchanges that have CO-OPs. CO-OP premiums are 19% higher than non-CO-OP premiums at the catastrophic tier level nationally. On average, CO-OP premiums are higher than their competitors’ by 4% for bronze plans, 6% for silver plans and 3% for gold plans.

Courtney White, a consulting actuary at Milliman, says CO-OPs’ higher premiums and status as a new entrant in the market will make it more challenging to compete.

“They don’t have the brand recognition that some of the more traditional carriers have,” he tells HRW. “A lot of it will depend on how well they can tell their story in the market, and how much of a difference there is between them and the lower-cost carriers.”

Visit http://aishealth.com/archive/nref110413-03 to read the article in its entirety, including more commentary from White, and a table comparing average CO-OP and non-CO-OP premium rates, per tier.

More data on premium rates and all other aspects of health insurance exchanges can be found in the recently released AIS’s Health Insurance Exchange Directory and Factbook. The CD version features a complete Excel workbook with specific rates per product for each state, as well as source documents with full rate information as released by states. For more information on the Directory, including how to order, visit http://aishealth.com/marketplace/aiss-health-insurance-exchange-factbook-and-directory.

About AIS’s Health Reform Week
AIS’s Health Reform Week is the nation’s leading publication on the business implications of the massive changes for the health industry mandated by reform. In addition to timely business news, the newsletter delivers a steady stream of sharp ideas from managers and consultants nationwide on topics like the launch of health exchanges, MLRs and rebates, essential health benefits, the end of pre-existing condition exclusions, gender rating and benefit caps, preventive services, MA/Part D reforms, ACOs and much more. Visit http://aishealth.com/marketplace/aiss-health-reform-week for more information.

About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.

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Jill Brown, Executive Editor
Atlantic Information Services
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