Kentucky is continuing to gain national recognition for its success in expanding health insurance coverage, most recently in a Gallup poll showing Kentucky had the second-biggest drop of all states in the share of its population that is uninsured. Most of those gaining coverage are eligible for Medicaid, but people buying insurance through Kynect are also finding it very affordable, with an average premium for those receiving tax credits of only $88 a month after the credits are applied.
One factor helping make costs affordable may be the creation of a new health insurance cooperative owned by its members that is scooping up most of the new enrollees.
According to recent state data, 85 percent of those who are fully enrolled through Kynect signed up for Medicaid, or 441,164 of the 520,604 enrollees. Of the remaining 79,440 individuals buying private coverage through the exchange, 62,220 or 78 percent have chosen a plan through the Kentucky Health Cooperative, with the remainder choosing a policy offered by a for-profit insurance company.
That means of all the Kentuckians who have signed up for coverage through Kynect, only 3 percent are with a for-profit insurance plan like Humana or Anthem.
Cooperatives were established by the Affordable Care Act (ACA) after the attempt to create a public option on the exchanges didn’t get enough support in Congress to pass. The fallback idea was that coops—which must be governed by their members—would introduce more competition to the marketplace in states with fewer for-profit insurers. They could compete with those insurers in part because their focus could be affordable coverage for their members without concern for profit margins and dividends for shareholders. The ACA included loans to get the cooperatives off the ground, and the Kentucky Health Cooperative received an $81 million loan.
Coops exist in 23 states, though their share of new enrollees varies across the country. Kentucky’s coop is one of the more successful ones, so successful that it is now expanding into West Virginia.
The market created by the exchanges is new and evolving, and it will be interesting to see if the next round of new sign-ups mirrors the first batch when open enrollment returns November 15, and what prices will look like. But for the time being, Kentucky’s new cooperative has been successful at offering a consumer-owned and attractive alternative to what the big insurance companies are putting forward.