Many Americans face the challenge of how to afford their medical bills and health insurance. The cooperative movement has revolutionized healthcare by enabling patients to enroll in co-op health plans.
Health insurance cooperatives save patients money on healthcare. Unlike typical insurance companies, a healthcare co-op does not pursue profit or have external stockholders. All revenue is allocated to the members, creating an inclusive, empowering way to maintain good health.
Most healthcare co-ops serve specific groups of people, like United Ag for farmers in California or HealthPartners for small businesses in Minnesota. As more patients enroll in a co-op’s health plan, costs are spread out among more members, which drives down the amount that each member has to pay.
Key Facts About Healthcare Co-ops
Healthcare co-ops operate on a local, state or national level to meet the needs of its members. Below are several key facts:
- 23 health insurance cooperatives were launched in 2012 as part of the Affordable Care Act
- Minnesota-based HealthPartners serves 1.2 million members and employs 26,000 people nationwide
- Over 1,000 member organizations are in United Ag’s network
- Examples of healthcare co-ops include HealthPartners, United Ag and Mountain Health CO-OP.
Health insurance cooperatives are owned and operated by the patients they insure. Thousands of member-owners share the cost of care. As the co-op’s revenue grows, members benefit from lower medical expenses and better bargaining power with healthcare providers.
Patients in a healthcare co-op receive medical services and prescriptions at an affordable price. Each co-op focuses on improving its members’ health and well-being — not increasing profits to pay executives and external shareholders. These organizations also differ from other nonprofit healthcare insurance providers because they’re governed by the consumers who belong to them.
More healthcare entrepreneurs are building cooperative companies to launch innovative healthcare solutions. Health insurance co-ops help lower medical costs and empower patients to choose the best health plan for their family.
A BRIEF HISTORY OF HEALTHCARE CO-OPS
Healthcare insurance co-ops trace their roots back to 1929 and the beginnings of the Great Depression. Under the New Deal, the federal government established the Farm Security Administration to relieve rural poverty. One of the goals of that agency was to reduce loan defaults spurred by poor health in farmers. The office loaned money to create healthcare associations run by community members and staffed by local physicians. Members paid fees to belong based on their incomes.
Most healthcare co-ops formed during that period have since ceased operation, though some have gone on to thrive. Two health services cooperative examples that have flourished include Group Health and HealthPartners, as mentioned above. Group Health debuted in 1947 and serves over 600,000 members in Washington and northern Idaho. In 1957, HealthPartners began in Minnesota. It’s since become one of the nation’s largest member-governed co-ops serving that state and Wisconsin.
Renewed interest in healthcare co-ops emerged during the Obama Administration’s Affordable Care Act (ACA) passage. The bill laid out options for funding and creating Consumer Oriented and Operated Plans (CO-OPs) and offering coverage to them through the exchange. When they originally launched, 23 co-ops were available, but the number has since substantially declined. As of 2021, only three states still offered CO-OPs established as a result of the ACA.
THE IMPORTANCE OF HEALTHCARE CO-OPS
Healthcare co-ops provide their members with more affordable access to life-sustaining and -improving treatments. Additionally, they help protect members against costly and unexpected medical bills. These organizations also positively impact local economies by creating jobs, and employees’ earnings support other businesses throughout the community.
BENEFITS OF HEALTHCARE CO-OPS
Healthcare cooperatives deliver numerous benefits for member patients and their providers.
Like all healthcare insurance providers, cooperatives have multiple plan options. That gives members maximum flexibility to choose the level that’s right for their budget and care needs.
Belonging to a healthcare co-op helps reduce the uncertainty associated with medical costs. Patients with less uncertainty about affordability are likelier to seek care. As a result, they’re more prone to earlier intervention that further lowers long-term care expenses.
Healthcare cooperatives also focus on member wellness. They cover comprehensive preventive care, and some provide extra perks such as fitness club membership discounts. When members use these features, they can proactively take control of their health by establishing good habits.
Reducing potential financial risks is another advantage of co-op membership. As more people join, costs decrease, enabling members to afford higher plan levels with budget-friendlier deductibles and out-of-pocket maximums. Members are therefore less likely to have to access credit or sell assets to pay for treatment.
HEALTHCARE PROVIDER BENEFITS
Staffing, equipping and managing a healthcare practice is costly, reinforcing the need for effective and fair payment recovery. Healthcare co-ops support that by increasing the average per-member recovery versus individuals who pay out of pocket. Improved profitability can also help enhance care quality, leading to better clinical outcomes.
Global Cooperative Associations
Around the world, cooperative alliances support healthcare cooperatives and defend the co-op business model:
- Cooperative Development Foundation
- International Co-operative Alliance
- Cooperatives for a Better World
NCBA CLUSA Advocates for Healthcare Co-ops
At NCBA CLUSA, we believe cooperative enterprise is a trusted, proven way to do business and build community. We envision a world where people have the resources and authority to foster well-being for themselves and future generations.
That’s why NCBA CLUSA has worked with members and partners for more than 100 years to advocate for cooperatives around the world. By focusing on local decision-making and empowerment, we advance economic opportunities and build healthy and resilient communities.
Have any questions before joining? Contact us online and let us know what’s on your mind.