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Senate Finance Committee Hearing: Health Insurance Exchanges: Progress Report
February 14, 2013Senator Bill Nelson Remarks on CO-OPshttp://www.finance.senate.gov/hearings/hearing/?id=4bb77d7d-5056-a032-52f7-9ce327daa5d6 Starting at 50:38:
Senator Nelson:
 
…
One of those incentives that we put into the law was the Consumer OrientedHealth Plans. A consumer oriented board would run a health insurance company. And it wasestimated that these were going to bring down the cost of premiums to the consumer by 10-15%.Mr. Chairman, in the 11
th
hour negotiation on trying to avert financial disaster on December 31st-
 New Year’s Eve
- these guys negotiated away the consumer oriented health plans. CO-OPs.
That’s the acronym. So I want to ask 
. Why was that negotiated away?
You’
ve given grants intoCO-OPs - approved applications- fir 24 states but not the remaining 26. There were applicationsin the pipeline, including applications from my state of Florida. Why was that negotiated away atthe 11
th
hour?
Director Cohen:
 
Senator, first of all I want to say we’re big supporters of CO
-OPs
…
 
Nelson:
The question is why was that lost at the 11
th
hour? Not that you
’
re a fan of them. Whatis the answer?
Cohen:
 
I don’t have an answer for you.
 
Nelson:
Well I can tell you that the representative of the majority leader, Kate Leone, in thenegations, has told this senator that when the question was
 – 
first of all, that HHS had put CO-OPS on the table as a source of revenue. And, at the 11
th
hour, the question was asked, are thereany applications in the pipeline. And in those 11
th
hour negotiations, the answer according to themajority leader
’s office
, was no, there are no applications. When in fact, over the course of thelast year, only 24 states
’
applications had been granted. And obviously there were plenty of applications. There was an application out to be awarded right after the first of the year. So Iwant somebody to be accountable for this. And if it was a mistake, for somebody to own up to
it. And then the questions is, since you say you don’t know, I would ask Mr. Chairman, that this
committee require an accounting, that HHS respond to this question. How did it happen that itgot negotiated away.Now, my question would be what are we going to do about it since CO-OPs in fact are estimatedto bring down the cost 10-15% for the consumer, for the premium payer? What are we going todo to get those other 26 states into the system?
Cohen:
Well Senator
what I’m going to do is to make sure t
hat the 24 CO-OPs that we havefunded are successful and demonstrate the results that you are talking about in terms of providingadditional competition and lowering costs in the health market.
That’s what I can do at this point.
 
Nelson:
So the answer is the remaining 26 states get zero?
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