La. Health Cooperative enrollment falls short

The Louisiana Health Cooperative, a nonprofit created with a $65.8 million federal loan under the Affordable Care Act, enrolled as of April 8 just over one-fourth of the customers the insurer originally expected, according to a U.S. House committee.

The Louisiana company, which signed up 7,773 of the 28,106 it expected, is one of 23 companies created nationally by the Affordable Care Act and $2 billion in total loans. The Consumer Operated and Oriented Plans, or CO-OPs, were designed to increase competition and offer affordable and innovative alternatives to the coverage offered by private insurance companies.

The company was one of four firms offering coverage in Louisiana through the federal online marketplace created by the Affordable Care Act. The others were private insurers Blue Cross and Blue Shield of Louisiana, Vantage Health Plan Inc. and Humana.

Individual numbers were not available for each firm, but close to 102,000 Louisiana residents enrolled through the federal marketplace in total. That means nearly 8 percent of them went to Louisiana Health Cooperative, based on its figures in the House committee report.

Of the 23 CO-OPS nationally, 14 failed to reach their original enrollment goals. Some 451,000 people bought coverage through the cooperatives, which originally expected to enroll about 575,000 people. The group as a whole reached 78 percent of the goal.

“This is really the first time that a lot of consumers are able to shop with side-by-side comparisons, so price is king,” said Austin Bordelon, a senior associate with health care consultants Leavitt Partners LLC. “Those … insurance co-ops that met or exceeded their enrollment projections are many times the most competitively priced products.”

Louisiana Health Cooperative and others created around the country didn’t have any claims data, so it was difficult for them to price their health plans competitively, Bordelon said. With a year’s experience under their belts, the cooperatives should have a better idea about pricing.

Louisiana Health Cooperative is headed by state Rep. Greg Cromer, R-Slidell. Company officials could not be reached for comment Thursday or Friday.

Competition created by the CO-OPs was expected to lower the cost of coverage, and supporters also hoped they would help slow a national trend in which one or two insurers dominate a market.

Bordelon said the CO-OPs’ enrollment efforts were hampered by technical issues with enrollment website healthcare.gov and by consumers’ lack of familiarity with the companies.

Critics, like Republican Congressman Darrell Issa, of California, say the low enrollment numbers will make it hard for the CO-OPs to stay in business or repay the loans. Issa chairs the House Committee on Oversight and Government Reform, which released the report on the CO-OPs’ performance.

Bordelon said the loan program’s requirements are onerous, with payments starting immediately. CO-OPs that can’t enroll enough members will have trouble two or three years down the line.

However, several of the CO-OPs are making aggressive expansion moves in their second year, with some using federal “expansion” loans to move into new markets, he said. For example, the Kentucky CO-OP is moving into West Virginia, the Montana CO-OP into Idaho, and the Massachusetts and Maine CO-OPs are moving into New Hampshire.

Health Republic Insurance of New York, which received a $174.4 million loan, topped the enrollment list with 112,006 people as of April 30, according to the House committee. Community Health Alliance Mutual Insurance Co. in Tennessee, which received a $207.1 million loan, had the lowest numbers with 354 enrolled.

Follow Ted Griggs on Twitter, @tedgriggsbr.