Physicians as Insurers


Physician networks and hospitals can potentially become insurers under a new federally-funded program called the Consumer Operated and Oriented Plan.

As part of the Affordable Care Act, there is going to be an influx people who need to get health care insurance and they’ll be able to get coverage from a new sort of insurance company. The Consumer Operated and Oriented plan is a federally-funded program where consumers can form a CO-OP plan.

A CO-OP is licensed by the state and fully financed by the government, which knocks down what is typically the largest barrier to entry to the insurance market, according to Mark Rust, chair of the National Healthcare Department at Barnes & Thornburg, LLP. There is a total of $3.8 billion of federal funding available for these plans.

The CO-OP program has already proven successful in a small handful of places, such as Madison, Wis., because not only do CO-OPs “inject some competition into the market,” but they are being run by the consumers, says Rust.

According to Rust, hospitals and physicians networks could greatly benefit from becoming insurance providers. Not only will they be providing insurance, but they’ll be consumers of that same product.

“It’s the world’s best marketing,” he says. “And it’s a piece of marketing that physician’s know in their bones, and that is that they have a big affect on patients in their choice of insurance companies."

When the health insurance exchanges are set up, CO-OPs will be in an ideal situation because they have to be included on the exchange.

However, there is a tight deadline looming for any groups interested in creating a CO-OP. The deadline for the first round of funding is Oct. 15, and a second deadline falls on Dec. 31. Groups need to come up with a business plan that outlines the provider network


“The only people who should be interested in this are people who are serious and who are willing to move fast,” Rust says.

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