In Maine, the insurer that has enrolled the most Obamacare customers isn’t the state’s well- established Blue Cross Blue Shield plan, owned by WellPoint Inc. It’s WellPoint’s only rival: Maine Community Health Options, a startup that didn’t exist three years ago.
The newcomer, funded primarily by taxpayer money lent under the U.S. health-care law, has won about 80 percent of the market so far in Maine’s new insurance exchange, exceeding its own expectations, said Kevin Lewis, the chief executive officer.
Obamacare opponents predicted early on that insurance co- ops created by the law would fail, and that much of the $2.1 billion they were loaned to get started would be lost. Instead, the 23 co-ops that now exist nationally have enrolled about 300,000 people in health plans by combining low premiums with a certain homespun appeal, according to company executives.
“We’re doing really well,” Lewis said in a telephone interview. Taxpayers face “no risk whatsoever” that Maine Community will go under, he said. “A lot of those early, dire concerns just need to be re-examined.”
Kristin Binns, a spokeswoman for Indianapolis, Indiana- based WellPoint, declined to comment on her company’s co-op competition.
The 2010 Patient Protection and Affordable Care Act refers to these new companies as “Consumer Operated and Oriented Plans,” or co-ops. To be sure, not all of the new companies have thrived. Some, such as Maryland’s, have struggled to sign people up because of problems with their state’s exchange while others, including Michigan, have set their premiums too high.
Price Leaders
The successful co-ops “emerged as price leaders,” responsible for more than a third of the lowest-premium plans offered on U.S. exchanges, according to an October report by the consulting firm McKinsey & Co.
Executives from these nonprofit groups in part credit innovative benefit designs for their success, including features that offer free doctors’ visits and generic drugs, and even $100 gift cards for people who get an annual physical. In Wisconsin, many customers of Common Ground Healthcare Cooperative appreciate the company’s nonprofit, member-governed business model, CEO Bob DeVita said.
“There’s a long-standing upper Midwest tradition with co- ops,” DeVita said in a telephone interview. “I think there was a lot of pent-up demand for that.”