Two co-op startups in Oregon health insurance market

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PORTLAND (AP) — Two startup cooperatives have joined a crowded health insurance market in Oregon, offering a consumer-run experience and hoping to draw customers who prefer smaller not-for-profits, or who support underdogs and alternative, DIY culture.

Oregon’s Health Co-op and Health Republic have filed policy details and proposed rates with the state, The Oregonian reported.

In October, they will go head-to-head with about a dozen established insurers to appeal to small businesses and more than 200,000 individuals expected to buy their own insurance next year.

Both startups feature bare-bones administration, more than $50 million in interest-free federal loans, and partnerships with existing health care players. A majority of the co-op board members will be plan members who are elected by other members.

They plan to promote services such as naturopathy in the case of Oregon Health Co-op and massage in the case of Health Republic.

Member-run health plans aren’t new, and some still exist, such as Group Health in Washington state.

The Affordable Care Act called for at least one co-op in every state to boost competition and bring health care costs down. But federal budget woes put a stop to the initiative after 24 received funding. Only Oregon got funds for two.

The Oregon operations have faced obstacles, such as starting from scratch without a customer base and such as actually offering lower prices.

In a comparison of the Portland individual market the state posted last week, the co-ops requested rates in the middle of the pack of the insurers — Oregon’s Health CO-OP at fifth best, and Health Republican at eighth. The state has yet to approve the filings, so rates could change.

Dave Ford, the retired head of CareOregon who helped recruit a leader to Oregon’s Health Co-op, said there’s a need for something different. But if the new co-ops don’t lead in lower premiums, their success will rely on providing special “sizzle” to lure new customers.

“If they can’t meet the price with some other compelling argument,” he says, “then they basically won’t make it.”

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