Private Health Insurance: Federal Oversight Premiums and Enrollment for Consumer Operated and Oriented Plans in 2015
Published: 2016-03-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Patient Protection and Affordable Care Act established the CO-OP program and provided loans that helped create 23 CO-OPs to offer qualified health plans to individuals and small employers. While the program seeks to increase competition and improve accountability to members, questions have arisen about their long-term sustainability and their effects on health insurance markets, particularly as 12 CO-OPs ceased operations on or before January 1, 2016.
In April 2015, GAO issued its first report examining the status of CO-OP premiums, enrollment, and program loans in 2014 ( GAO-15-304 ). As one CO-OP ceased operations in early 2015, GAO was asked to review the CO-OP program again. This report examines (1) how CMS monitors the CO-OPs' performance and sustainability; (2) how CO-OP premiums changed from 2014 to 2015, and in 2015, how they compared to premiums for other health plans; and (3) how CO-OP enrollment changed from 2014 to 2015, and in 2015, how it compared to projections. GAO analyzed 2014 and 2015 premium and enrollment data from CMS, states, and the National Association of Insurance Commissioners; and reviewed applicable regulations, policies, procedures, and documentation of CMS monitoring activities. GAO also interviewed CMS officials.
In commenting on a draft of this report, the Department of Health and Human Services stated its commitment to CO-OP beneficiaries and taxpayers, and provided technical comments, which GAO incorporated as appropriate.
section_title: What GAO Found
paragraphs: The Centers for Medicare & Medicaid Services' (CMS) monitoring of the consumer governed, nonprofit health insurance issuers—known as consumer operated and oriented plans (CO-OPs)—evolved as the CO-OP program matured, and as 12 of the 23 CO-OPs ceased operations on or before January 1, 2016. CMS's initial monitoring activities, starting when it began to award CO-OP program loans in early 2012, focused on the CO-OPs' progress as start-up issuers and their compliance with program requirements. Since then, CMS refined and expanded its monitoring to evaluate CO-OP performance and sustainability. CMS officials use enrollment and financial data to identify CO-OPs for which actual performance differed substantially from what was expected. CMS officials also perform routine assessments of each CO-OP's risk in various areas, such as working capital and management. To evaluate and respond to financial or operational issues identified at CO-OPs, CMS formalized a framework that it called an escalation plan. Under this plan, CMS may require that a CO-OP take corrective actions or the agency may implement an enhanced oversight plan based on its evaluation of the issue. As of November 2015, CMS used its escalation plan to evaluate and respond to issues at 18 CO-OPs, including 9 of the CO-OPs that have ceased operations. CMS officials told GAO that they plan to work with states' departments of insurance to continue monitoring CO-OPs that have ceased operations to the extent possible in order to minimize any negative impact on members and, if possible, recover loans made through the program.
GAO found that in 14 of the 20 states where CO-OPs offered health plans during both 2014 and 2015, the average CO-OP premiums for 30-year-old individuals purchasing silver health plans—the most commonly selected plan—were lower in 2015 than the average premiums for such plans in 2014. In the 23 states where CO-OPs offered health plans during 2015, the average premiums for all CO-OP health plans were lower than those for other issuers in more than 75 percent of rating areas—geographical areas established by states and used, in part, by issuers to set premium rates. Across the 23 states, average silver health plan premiums were lower for CO-OPs than other issuers in 31 percent to 100 percent of rating areas.
In addition, GAO found that the combined enrollment for the 22 CO-OPs that offered health plans in 2015 was over 1 million as of June 30, 2015, more than double the enrollment of a year earlier. More than half of these members were in CO-OPs that ceased operations. GAO also found that the combined enrollment for all 22 CO-OPs in 2015 exceeded their projections for 2015 by more than 6 percent. Of the 11 CO-OPs that have ceased operations, 6 did not meet their individual enrollment projections for 2015. Among the 11 CO-OPs that continue to operate in 2016, 4 CO-OPs had not yet reached a program benchmark of enrolling at least 25,000 members. CMS officials told GAO that exceeding this benchmark represents a level of enrollment that should better allow an issuer to cover its fixed costs; CMS officials told GAO that they are monitoring the CO-OPs' enrollment with attention to this benchmark.

section_title: Letter
paragraphs: The Patient Protection and Affordable Care Act (PPACA) established the  consumer operated and oriented plan (CO-OP) program—a loan program  intended to foster the creation of new, consumer-governed, nonprofit  health insurance issuers, known as CO-OPs, to offer qualified health  plans to individuals and small employers. For this purpose, PPACA  appropriated funding for the Centers for Medicare & Medicaid Services  (CMS), the agency within the Department of Health and Human Services  (HHS) that administers the CO-OP program, to award loans totaling more  than $2.4 billion. The funding disbursed under these loans helped  establish 23 CO-OPs that began offering health insurance in 2014. (See  appendix I for a list of the 23 CO-OPs.)
The CO-OP program is intended to enhance competition in the states’  markets for health insurance sold directly to individuals and small  employers—which potentially could reduce health plan premiums—while  improving choice for consumers and encouraging accountability to  members. However, 12 CO-OPs ceased operations on or before   January 1, 2016, renewing questions previously raised about the  long-term sustainability of the CO-OPs and the effects that they will  ultimately have on states’ health insurance markets. Such questions led  to our first review of the CO-OP program. In April 2015, we reported that  as of January 2015, CMS disbursed more than two-thirds of the $2.4  billion in CO-OP program loans awarded. We also reported that while the  average premiums for CO-OP health plans were generally lower than  those for other issuers, most CO-OPs did not meet their initial enrollment  projections during the first enrollment period (October 1, 2013, through  March 31, 2014).
Given that questions about CO-OP sustainability and their ultimate impact  continue, you asked us as the first CO-OP began to cease operations in  early 2015 to conduct a follow-up review of the CO-OP program. In this  report, we examine the following  1.  How does CMS monitor the CO-OPs’ performance and sustainability?  2.  How did premiums for CO-OP health plans change from 2014 to  2015, and in 2015, how did they compare to premiums for other  health plans?  3.  How did enrollment in CO-OP health plans change from 2014 to 2015,  and in 2015, how did it compare to projections?
To examine how CMS monitors the CO-OPs’ performance and  sustainability, we reviewed CMS policies and procedures regarding its  monitoring activities, as well as documentation from CMS related to the  implementation of those activities. In particular, we reviewed  documentation regarding eight CO-OPs selected to reflect differences in  the total amount of loan awards, the total amount of loan awards  disbursed, actual enrollment in early 2015, geographic location, and the  type of health insurance exchange (i.e., a federally facilitated or state- based exchange) operated in the state or states where the CO-OP  offered health plans. We also interviewed officials from CMS regarding  the agency’s oversight activities from 2013, prior to the first enrollment  period, through the beginning of the open enrollment period in November  2015, including their monitoring of the 12 CO-OPs that ceased operations  and other CO-OPs the agency considered at risk. We assessed CMS  monitoring activities in the context of internal control standards.
To examine how 2015 premiums for CO-OP health plans differed from  2014 premiums, we analyzed data regarding premiums on the health  insurance exchanges of the 23 states where CO-OPs operated in 2015.  This data included premium data that we obtained from CMS for the 16  states that either had a federally facilitated exchange or a federally  supported state-based exchange where CO-OPs participated during the  2015 open enrollment period (November 15, 2014, through February 15,  2015). We also obtained comparable premium data from the 7 states that  had state-based exchanges where CO-OPs participated. For the 20  states where CO-OPs offered health plans on an exchange during both  the 2015 open enrollment period and the 2014 open enrollment period  (October 1, 2013, through March 31, 2014), we calculated and compared  the state-wide average CO-OP premium for silver tier health plans—the  most commonly selected of the five levels of benefit coverage, including  plans specified by metal level, as well as catastrophic plans—for 30-year- old individuals in 2014 and 2015. To examine how 2015 premiums for  CO-OP health plans compared to the premiums for other health plans in  the 23 states where CO-OPs operated in 2015, we calculated and  compared the average CO-OP premium with the average premium for  other health plans for each rating area (geographical areas established by  states and used, in part, by issuers to set premium rates) and for each  health plan tier. We did this for eight different categories of policyholder:  30, 40, and 60-year-old individuals and couples, and 30 and 50-year-old  couples with two children.
To examine how enrollment in CO-OP health plans changed from 2014 to  2015, we obtained data from the National Association of Insurance  Commissioners (NAIC) on quarterly statements dated June 30, 2015, and  annual statements dated December 31, 2014, filed by each of the  CO-OPs that operated in 2015. We then compared enrollment as of  June 30, 2014, to enrollment as of June 30, 2015, for each CO-OP. To  examine how CO-OP 2015 enrollments compared to projections, we  obtained from CMS estimates of projected enrollment made by each  CO-OP. We compared actual 2015 enrollment as of June 30, 2015, to  the CO-OPs’ estimates of projected enrollment.
To assess the reliability of the data we obtained from CMS on CO-OP  program loans, CO-OP and other issuer premiums, and CO-OP  enrollment, we performed manual and electronic testing to identify  missing data and other anomalies, and interviewed agency officials to  confirm our understanding of the data. To assess the reliability of the data  we obtained from states on CO-OP and other issuer premiums, we  performed manual and electronic testing to identify missing data and  other anomalies, and followed up with state officials and incorporated  corrections as necessary. To assess the reliability of the CO-OP  enrollment data we obtained from NAIC, we compared NAIC data to  similar data obtained from CMS for consistency. Based on these  procedures, we determined that the data were sufficiently reliable for our  purposes.
We conducted this performance audit from June 2015 to March 2016, in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: CO-OP Program Requirements, Loans, and Funding
paragraphs: PPACA established certain conditions governing participation in the  CO-OP program. Specifically, PPACA defines a CO-OP as a health  insurance issuer organized under state law as a nonprofit, member  corporation of which the activities substantially consist of the issuance of  qualified health plans in the individual and small group markets in the  state where the CO-OP is licensed to issue such plans. PPACA prohibits  organizations that were health insurance issuers on July 16, 2009, or  sponsored by a state or local government, from participating in the  CO-OP program. PPACA also requires that (1) governance of a CO-OP  be subject to a majority vote of its members; (2) the governing documents  of a CO-OP incorporate ethics and conflict of interest standards  protecting against insurance industry involvement and interference; and  (3) the operation of a CO-OP have a strong consumer focus, including  timeliness, responsiveness, and accountability to its members.
Consistent with PPACA, CMS established two types of CO-OP program  loans: start-up loans and solvency loans.
Start-up loans cover approved start-up costs including salaries and  wages, fringe benefits, consultant costs, equipment, supplies, staff  travel, and certain indirect costs. Disbursements were made  according to a schedule established in the loan agreement between  CMS and the loan recipient, and were contingent upon the loan  recipient’s achievement of program milestones. Milestones included  obtaining health insurance licensure and submitting timely reporting  information in the required format. Each disbursement for a start-up  loan must be repaid within 5 years of the disbursement date.
Solvency loans assist CO-OPs in meeting states’ solvency and  reserve requirements. CO-OPs may request disbursements of  solvency loans “as needed” to meet these requirements and  obligations under their loan agreement with CMS. Reasons for a  CO-OP’s need for additional solvency disbursements could include  enrollment growth or higher than anticipated claims from members.  CO-OP requests are subject to CMS review of necessity and  sufficiency. Each disbursement of a solvency loan must be repaid  within 15 years of the disbursement date.
PPACA appropriated $6 billion for the CO-OP program; however, a series  of subsequent laws reduced the appropriation by about 80 percent and  limited program participation. Specifically, in 2011, two separate  appropriations acts rescinded $2.6 billion of the original CO-OP  appropriation. Additionally, in January 2013, the American Taxpayer  Relief Act of 2012 rescinded $2.3 billion in unobligated CO-OP program  appropriations, and as a result, about $1.1 billion of the original  appropriation was available for the costs associated with the $2.4 billion  in loans awarded and program administration. The American Taxpayer  Relief Act of 2012 transferred any remaining appropriations to a  contingency fund for CMS to provide assistance and oversight to CO-OP  loan awardees, which meant that no additional CO-OPs could be funded  through the CO-OP program.
section_title: CO-OP Participation in States’ Health Insurance Exchanges
paragraphs: The participation of CO-OPs in states’ health insurance exchanges has  varied since their establishment:
For 2014, 22 CO-OPs offered health plans on the health insurance  exchanges of 22 states. One CO-OP participated in both the Iowa  and the Nebraska exchanges, and two CO-OPs offered health plans  on the exchange in Oregon. The CO-OP for Ohio offered plans off the  exchange, but did not participate in the state’s exchange.
For 2015, 22 CO-OPs offered health plans on the exchanges of 23  states. While the Ohio CO-OP participated in the exchange for Ohio  for the first time, the CO-OP that offered plans on both the Iowa and  the Nebraska exchanges withdrew from participation. In addition, the  CO-OPs in Maine and Massachusetts both expanded to the New  Hampshire exchange and the CO-OP from Montana expanded to the  Idaho exchange.
For 2016, 11 CO-OPs continued to offer health plans on the  exchanges of 13 states as of January 4, 2016. The CO-OPs that  offered health plans in Arizona, Colorado, Kentucky, Louisiana,  Michigan, Nevada, New York, South Carolina, Tennessee, and Utah,  and one of the CO-OPs that offered health plans in Oregon, ceased  operations on or before January 1, 2016. (See fig. 1.)
section_title: Disbursement of CO-OP Loan Awards
paragraphs: CMS awarded the 11 CO-OPs that continued to operate as of January 4,  2016, about $1.2 billion in combined start-up and solvency loans, and  awarded about the same amount to the 12 CO-OPs that ceased  operations. For the 11 CO-OPs that continued to operate, CMS  disbursed, as of November 2015, about $897 million (74 percent) of the  CO-OP program loans awarded. Specifically, it disbursed 100 percent of  the loans awarded to 2 CO-OPs, and from 57 percent to 91 percent of the  loans awarded to the other 9 CO-OPs. This range primarily reflects  differences in the percentage of solvency loan awards disbursed to each  CO-OP, as disbursements of the start-up loan awards totaled nearly 100  percent. Disbursements of solvency loan awards to the 9 CO-OPs that  received less than 100 percent of their awards ranged from 49 percent to  89 percent. For the 12 CO-OPs that ceased operations, CMS had  disbursed 100 percent of the loan awards to 8 CO-OPs, while the  percentage disbursed to the other 4 CO-OPs ranged from 84 percent to  98 percent. (See fig. 2.)
section_title: Federal and State Roles Related to the CO-OP Program
paragraphs: CMS and state regulators have different, but complementary, roles for the  CO-OP program. As the agency that administers the CO-OP program,  CMS is responsible for  interpreting statutory requirements and issuing regulations regarding  CO-OP program eligibility, standards, and loan terms; soliciting and approving loan applications of qualified applicants; determining loan award amounts and negotiating the related loan establishing and updating CO-OP program policy, procedures, and approving the disbursement of loan funds to CO-OPs; and monitoring CO-OP financial controls and compliance with applicable  statutory requirements and related regulations, loan agreements, and  CO-OP program policy and guidance.
While CMS has oversight responsibilities for the CO-OP program, state  regulators have primary oversight authority of the CO-OPs as health  insurance issuers. This authority includes issuing and revoking licenses to  offer health plans, monitoring issuers’ financial solvency and market  conduct, as well as reviewing and approving premium rates and policy  and contract forms. CMS requires CO-OPs to report any requirements  from and meetings with state regulators regarding their oversight to CMS.  In addition, according to a CMS official, the agency has coordinated  oversight activities with state regulators when appropriate.
section_title: PPACA Provisions on Health Insurance Premiums, Benefits, and Risk Mitigation Programs
paragraphs: PPACA established rules governing how issuers, including CO-OPs, may  set premium rates. For example, while issuers may not consider gender  or health status in setting premiums, issuers may consider family size,  age, and tobacco use. Also, issuers may vary premiums based on areas  of residence. States have the authority to use counties, Metropolitan  Statistical Areas, zip codes, or any combination of the three in  establishing geographic locations across which premiums may vary,  known as rating areas. The number of rating areas per state varies,  ranging from a low of 1 to a high of 67. Most states have 10 or fewer  rating areas.
PPACA also requires that coverage sold include certain categories of  benefits at standardized levels of coverage specified by metal level— bronze, silver, gold, and platinum. Each metal level corresponds to an  actuarial value—the proportion of allowable charges that a health plan, as  opposed to the consumer, is expected to pay on average. Health plans  within a metal level have the same actuarial value, while plans from  different metal levels have different actuarial values and pay a higher or  lower proportion of allowable charges. For example, a gold health plan is  more generous overall than a bronze health plan. Actuarial values for  health plans under PPACA range from 60 to 90 percent by metal level as  follows: bronze (60 percent), silver (70 percent), gold (80 percent), or  platinum (90 percent).
Issuers may also offer “catastrophic” health plans to individuals under 30  and individuals exempt from the individual mandate. Catastrophic plans  have actuarial values that are less than what is required to meet any of  the other metal levels. Although these plans are required to cover three  primary care visits and preventive services at no cost, they generally do  not cover costs for other health care services until a high deductible is  met.
Some PPACA provisions, such as those that prohibit issuers from  considering gender and health status in setting premiums and from  denying coverage based on health status, reduced issuers’ ability to  mitigate the risk of high-cost enrollees. To limit the increased risk that  issuers could face, PPACA also established three risk mitigation  programs: a permanent “risk adjustment” program and two temporary  programs, “reinsurance” and “risk corridors”. Each of these programs  uses a different mechanism intended to both improve the functioning of  the health insurance markets and stabilize the premiums that issuers  charge for health coverage. For example, the risk adjustment program  transfers funds from issuers with lower risk enrollees to those with higher  risk enrollees, and the risk corridor program transfers funds from issuers  with high profits to those with high losses.
section_title: CMS Expanded and Refined CO-OP Monitoring Activities as the Program Matured
paragraphs: Since it began awarding CO-OP loans, CMS’s oversight has evolved from  monitoring the establishment of the CO-OPs to monitoring their  performance and sustainability. CMS also refined its monitoring activities  by formalizing a framework for responding to issues at specific CO-OPs,  and it continues to adjust its monitoring as some CO-OPs have ceased  operations.
subsections: section_title: Initial CMS Monitoring Focused on CO-OPs’ Progress as Start-up Issuers
paragraphs: CMS’s initial activities to monitor the CO-OPs, starting when it began  awarding CO-OP loans in early 2012, tracked their progress in becoming  health insurance issuers (for example, establishing provider networks,  arranging appropriate office space, and filling key management positions)  and their compliance with program requirements (for example,  establishing governance subject to a majority vote of its members and  incorporating ethics and conflict-of-interest standards). During this initial  period, CMS established two core monitoring activities to be conducted  by a CMS account manager—a primary point of contact at CMS who is  responsible for the day-to-day monitoring of individual CO-OPs. These  two core activities were
Routine teleconferences with CO-OPs. The account manager  participated in routine teleconferences with key stakeholders from  each CO-OP. Key CO-OP stakeholders could have, for example,  included the chief executive officer, chief financial officer, chief  operating officer, or the chief information officer. CMS policy initially  required that these meetings take place on at least a bi-weekly basis.  According to CMS officials, the frequency of these meetings varied  across CO-OPs depending on the progress demonstrated by the  CO-OP. Items discussed during these meetings could have, for  example, included the CO-OP’s implementation of its business plan or  progress in achieving the milestones of its disbursement schedule, as  well as any challenges, issues, concerns, and questions the CO-OP  had. CMS account managers maintained documentation of these  teleconferences electronically.
Standard reporting. CMS required each CO-OP to submit standard  reports that provide financial and other performance related  information. (See table 1.) CMS account managers tracked the timely  submission and completeness of each report. Reports submitted by  the CO-OP were maintained electronically for CMS officials to review,  as needed.
In addition, CMS hired an independent auditor to review each CO-OP’s  compliance with its loan agreement; key federal and state requirements,  such as those related to governance of the CO-OP, the use of loan  funding, types of investments; and the documentation that supported  financial reporting. CMS officials stated that these reviews were  completed in 2013 and 2014.
According to officials, CMS used the information obtained from these  initial monitoring activities to assess loan recipients’ progress in  establishing start-up health insurance issuers and compliance with  CO-OP program requirements. From the time loans were granted through  November 2014, if there was a problem that presented a significant risk to  a recipient’s viability or a pattern of noncompliance with program  requirements, CMS required an improvement plan. CMS policy states that  an improvement plan could include (1) a corrective action plan to resolve  noncompliance with program requirements or the terms and conditions of  a loan agreement; (2) an enhanced oversight plan requiring stronger and  more frequent CMS review of operations and financial status; (3)  technical assistance to help improve performance, meet program  requirements, or fulfill terms and conditions of the loan agreement; or (4)  withholding of loan disbursements until milestones were achieved.  According to CMS officials, the agency required improvement plans for  five different CO-OPs during this time period. Officials stated that these  plans generally focused on issues with meeting start-up milestones,  including the CO-OP’s capability to obtain licensure or comply with  program requirements when establishing contractual relationships with  providers or vendors for necessary services, such as information  technology.
section_title: CMS Expanded and Refined CO-OP Monitoring Activities as the Program Matured
paragraphs: As CO-OPs began enrolling members, CMS supplemented its initial  monitoring activities with additional tools to evaluate CO-OP performance  and sustainability. CMS also formalized a framework for responding to  financial or operational issues identified at specific CO-OPs and  enhanced its reporting requirements to support the newly developed  tools. CMS officials told us that they expect to monitor CO-OPs that have  ceased operations to the extent possible.
CMS developed two tools that analyze enrollment and financial data, and  other information collected from the CO-OPs:  Direct analysis. CMS officials developed a tool to analyze various  aspects of performance, including enrollment, net income, premium  revenues, claims and administrative expenses, and financial information  related to risk mitigation programs and reserves. According to CMS  officials, they conduct this analysis on a quarterly basis and compare the  information with CO-OP projections and—when possible—to industry  benchmarks. According to CMS officials, if direct analysis indicates that  an individual CO-OP deviates appreciably from projections or otherwise  signals a potential difficulty, then CMS officials perform additional review  and analyses. CMS officials also noted that the direct analysis may, at  times, be focused on particular areas of concerns. For example, during  2015, CMS looked closely at the CO-OPs’ expectations related to risk  mitigation programs: CMS officials monitored the extent to which each  CO-OP’s financial projections relied on estimated payments from risk  mitigation programs. CMS officials told us that because of these  analyses, they were able to identify CO-OPs that would likely face  increased financial difficulties when the agency announced on October 1,  2015, that issuers eligible for payments through the risk corridor program  would likely receive only a portion—12.6 percent—of the total amounts  they claimed. CMS officials told us that they worked with these CO-OPs  to address concerns associated with these payments.
Risk assessment. CMS also developed a tool to assess risk based on  data collected through its established monitoring activities. CMS officials  told us that they use this tool on a quarterly basis to assess risk across  seven factors:  1.  Long-term sustainability. CMS assesses risk based on whether a  CO-OP expects to break even financially by 2017 and, if so, the  extent to which a CO-OP expects to repay start-up loans while  maintaining required reserve levels. CMS officials told us that  although some viable CO-OPs might not expect to break even by  2017, they selected this date, in part, to provide a common basis for  developing a risk score, because the first repayments of CO-OP loans  are due in 2017.  2.  Working capital. CMS assesses risk based on whether a CO-OP  expects to generate net revenues from premiums, risk mitigation  programs, or other funding sufficient to cover operating expenses over  the next 12 months and, if not, the extent to which the CO-OP plans to  rely on the disbursement of any remaining solvency loan funds.  3.  Profitability. CMS assesses risk based on whether the CO-OP’s  performance is consistent with the projections in its business plan.  This risk category does not measure current profitability.  4.  Compliance with state requirements. CMS assesses risk based on  whether a state department of insurance determined that a CO-OP  was non-compliant with state requirements and, if so, the extent to  which remedial action has been implemented. CMS also considers  whether the CO-OP has had a history of non-compliance and the  severity of any regulatory action taken by a department of insurance.  5.  Compliance with CO-OP program requirements. CMS assesses risk  based on whether the agency has determined that a CO-OP was non- compliant with CO-OP program loan terms and provisions and, if so,  the extent to which the CO-OP has been responsive to CMS officials’  requests. CMS also considers whether the CO-OP experienced any  legal compliance issues that would affect participation in the program.  6.  CO-OP management. CMS assesses risk based on whether the  agency identified conflicts of interest with CO-OP management and  performance concerns including high turnover, fraud, or a lack of  appropriate internal controls.  7.  CO-OP infrastructure issues. CMS assesses risk based on whether  the agency identified concerns involving the CO-OP’s key operating  systems—including claims, enrollment and billing, customer service,  and utilization management.
For quantitative factors included in the risk assessment, CMS officials told  us they compare individual CO-OP data to benchmarks and assign a risk  level (high, medium-high, medium, and low) based on the extent of  deviation from the benchmarks. For qualitative factors, CMS officials told  us they assign CO-OPs a risk level based on responses to a standard set  of questions completed by account managers.
To help ensure the most current data are available to be used in the  direct analysis and risk assessment tools, CMS enhanced certain  reporting requirements associated with the core monitoring activities it  previously established. While the agency continues to require routine  teleconferences with CO-OPs and standard reporting, CMS enhanced its  initial reporting requirements to include submission of enrollment and  selected financial data on a monthly basis rather than on a quarterly  basis. CMS also now requires CO-OPs to provide certain financial  projections quarterly rather than annually.
To respond to issues identified at individual CO-OPs using the direct  analysis and risk assessment tools, as well as its other monitoring  activities, in November 2014, CMS formally established a framework,  known as an escalation plan, for evaluating and responding to concerns.  The identification of an issue at a CO-OP is the first of four steps  described in the written guidance for establishing and implementing the  escalation plan. (See fig. 3.)
Issue identification. CMS initiates the escalation plan when the agency  identifies an issue of potential concern at a CO-OP. Identification may be  based on information obtained through a variety of sources, including  internal channels (e.g., the core monitoring activities, direct analysis, and  risk assessments described above) and external channels (e.g.,  communication with state regulators).
Issue assessment. A CMS account manager conducts a preliminary  assessment of the severity, urgency, and nature of the identified issue.  Using a standard set of questions, the account manager assesses the  issue in light of five sets of considerations: (1) whether the issue was self- reported by the CO-OP and the frequency with which the CO-OP  experienced the same or other issues, (2) the potential impact on the  CO-OP’s state licensure and exchange participation, (3) the potential  impact on the CO-OP’s approved business plan, (4) the potential impact  on the CO-OP’s compliance with program requirements, and (5) the  potential impact on the CO-OP’s members and markets where it  participates. Answers to questions about these considerations result in a  score that indicates whether the issue’s severity and urgency is of minor,  moderate, elevated, or greatest concern. The account manager then  refers the preliminary assessment for review and approval by other CMS  officials, including a team that has responsibility for evaluating CO-OP  program integrity.
Enforcement action. CMS determines an enforcement action based on  the final assessment of the issue as of minor, moderate, elevated, or  greatest concern. Enforcement actions generally require a corresponding  response from the CO-OP to resolve the issue. If the CO-OP’s response  to an enforcement action does not result in an acceptable resolution to an  issue, the agency may elevate the assessment to a higher level and  require additional responses from the CO-OP.
Minor. CMS communicates with CO-OP officials to resolve the issue  and prevent a recurrence. Examples of issues that might be assessed  as minor—if no other issues were identified—would be challenges in  submitting a required report or a divergence of less than 20 percent  between the CO-OP’s actual enrollment and its most recently  projected enrollment.
Moderate. CMS sends a formal written notice of the issue, known as a  warning letter, to CO-OPs that have an issue assessed as a moderate  concern. In response, CO-OP officials are required to submit evidence  of the development and implementation of a plan to resolve the issue.  As of November 9, 2015, CMS had issued warning letters to 11  CO-OPs, of which 7 continue to operate. According to CMS officials,  issues for which CMS issued warning letters included the execution of  a contract that is core to the CO-OP’s business activity (e.g., a  contract for a top executive) without the requisite prior CMS approval,  and the submission of incomplete data for one of the risk mitigation  programs.
Elevated. CMS sends CO-OPs a formal written notice that a  corrective action plan is required, an enhanced oversight plan will be  implemented, or both. According to CMS officials, they generally  require the CO-OP to develop a corrective action plan when they  determine that the CO-OP can take action to address the issue and  that the action and its effect can be documented; the corrective action  plan is subject to CMS approval and monitoring. CMS officials  implement an enhanced oversight plan when the issue is urgent or  has the potential to become more severe. In response to an enhanced  oversight plan, a CO-OP may be required to submit additional reports  or may be subjected to additional audits. As of November 9, 2015,  CMS had required corrective action plans or implemented enhanced  oversight plans (or both) for 15 CO-OPs, of which 8 continue to  operate in 2016. Issues for which these were required include  CO-OPs failing to comply with state laws and experiencing high  enrollment and significant losses. CMS noted that some of the  corrective action plans and enhanced oversight plans were the result  of unresolved issues that required stronger enforcement actions.
Greatest. CMS sends CO-OPs a formal written notice, and if a  correction action plan and/or enhanced oversight plan cannot resolve  the issue, CMS may consider terminating the CO-OP from the  program or taking other enforcement measures, such as withholding  loan disbursements. As of November 9, 2015, CMS officials had  identified an issue of greatest concern at two CO-OPs. For one  CO-OP, it required a corrective action plan, and for the other CO-OP,  it issued a termination letter. CMS officials noted that these two  CO-OPs had issues involving serious and pervasive management  problems or financial losses substantial enough to question the  CO-OP’s sustainability. Both CO-OPs ceased operations on, or  before, January 1, 2016.
Resolution. CMS monitors the CO-OP’s progress for resolving an  identified issue through status calls, additional reporting requirements, or  other actions as appropriate. For some issues determined to be of  elevated or greatest concern, CMS may conduct an on-site visit. If CMS  determines that an issue has been resolved, CMS returns to a more  routine level of monitoring, mindful of the history that the CO-OP had with  the issue. If the problem is not resolved, or if the process of investigating  an issue reveals other issues, CMS can re-assess the issue and take  further actions, and it has done so with several CO-OPs. As already  noted, CMS may ultimately determine that a satisfactory resolution is not  likely and therefore pursue the option to terminate its loan agreement with  the CO-OP. As of November 1, 2015, CMS had issued one termination  letter following use of the escalation plan.
Escalation Plan Case Study: Louisiana Health Cooperative, Inc.  CMS officials learned in December 2014, through routine communication with the  CO-OP and the Louisiana Department of Insurance (LDI), that LDI was preparing to  notify the CO-OP that it had been found in a condition that would render continuance of  its business hazardous to policyholders, creditors, or others. CMS had previously noted  certain risks with the CO-OP’s finances. CMS assessed the issue as an elevated  concern and issued a letter in January 2015 requiring the CO-OP to provide information  and a corrective action plan. The CO-OP responded in February 2015, citing problems  with its third-party administrator—an entity with which the CO-OP had contracted to  process claims—and describing its corrective action plan. CMS determined that the plan  was not sufficient and issued a letter in March 2015 requesting revisions. The CO-OP  submitted a revised corrective action plan, which CMS officials also found insufficient.  Meanwhile, in response to LDI, the CO-OP submitted updated enrollment and financial  data, which led CMS to question whether enrollment was sufficient for financial stability.  CMS issued another letter in April 2015, asking for information and a corrective action  plan to address these issues and stating that CMS would conduct a site visit. During  that visit, CMS officials observed a number of serious and pervasive deficiencies. In  response, CMS reassessed the issue as one of greatest concern and issued a letter in  June 2015, summarizing its findings and stating that a complete and quick resolution  was necessary to avoid termination of the loan agreement; the letter included specific  milestones and dates. The CO-OP’s board met in July and decided to cease operations  by the end of 2015. According to CMS officials, the agency continues to monitor and  oversee the CO-OP as the CO-OP and LDI work to cease operations with as few  negative consequences as possible.
In addition to developing the tools to evaluate performance and  sustainability and the escalation plan, CMS formed a committee that,  according to CMS officials, is to look at the CO-OP program as a whole— beyond individual issues or CO-OPs. The committee is to identify and  address risks to, and concerns about, the program and make  recommendations to address any risks or concerns identified. CMS  officials told us that the committee consists of officials from across the  agency with actuarial, health insurance, financial, legal, and health  insurance exchange experience and expertise.
CMS is also using an independent auditor to conduct another review of  CO-OPs, focusing on compliance and financial management. A  preliminary audit phase was conducted to determine whether each  CO-OP had established and documented controls and processes for five  key areas, in accordance with the NAIC Market Conduct Examination  Standards: (1) claims, (2) policyholder service, (3) complaint handling, (4)  provider credentialing, and (5) marketing and sales. Based on the  results of the preliminary phase, the auditor is to perform one of two types  of reviews—a general review or a focused review—at each CO-OP; a  more focused review is to be performed at CO-OPs that did not appear to  have initially met the NAIC Market Conduct Examination Standards. CMS  officials told us that the preliminary phase was completed in June 2015,  and that the second phase is on-going and is expected to be completed  by the middle of 2016 for the 11 CO-OPs that continued to operate as of  January 4, 2016.
CMS officials told us that prior to the start of the 2016 open enrollment  period, they assessed the CO-OPs with particular attention to their  sustainability through 2016. According to CMS officials, they worked with  CO-OPs and states’ departments of insurance to address concerns  relating to CO-OP sustainability. The goal of these efforts was to provide  some assurance that CO-OPs with serious financial or operational  difficulties (or both) took timely and effective action to address those  difficulties or made plans to cease operations before the 2016 open  enrollment period, which began on November 1, 2015. In addition, CMS  officials told us that, to the extent possible, they plan to monitor CO-OPs  that have ceased operations. When a CO-OP closes, the state’s  department of insurance takes the lead responsibility in winding down  operations. CMS officials told us that their goal is to work with the  CO-OPs and their states’ departments of insurance to bring operations to  an end in a way that minimizes negative effects on members, as well as  to recover program loan funding to the extent possible.
section_title: CO-OPs’ 2015 Premiums Were Generally Lower than Their 2014 Premiums and Other Issuers’ 2015 Premiums
subsections: section_title: Most CO-OPs’ Premiums for 2015 Were Lower than Their 2014 Premiums
paragraphs: Our analysis showed that in most of the 20 states where CO-OPs offered  health plans on the exchange during both the 2014 and 2015 open  enrollment periods, the state-wide average monthly premium for a   30-year-old individual to purchase a CO-OP silver health plan was lower  for 2015 than for the previous year. Specifically, there were 14 states  where the state-wide average monthly premium for silver plans offered by  CO-OPs decreased, with decreases ranging from $1.47 per month in  Kentucky to $180.44 per month in Arizona. In 9 of these states, the  decrease in the state-wide average premium was more than $30 per  month. Of the 6 states where the state-wide average premium for silver  plans offered by CO-OPs increased, the increases did not exceed $20  per month. As table 2 shows, the pattern of changes in average  premiums for CO-OPs that continued to operate as of January 4, 2016, is  similar to the pattern of change for CO-OPs that have ceased operations.  Of the 11 states where CO-OPs no longer operate, 5 had decreases in  the CO-OP’s average monthly premium of more than $30, while the other  6 had increases or decreases less than $30. In the 10 states where  CO-OPs continued to operate as of January 4, 2016, 4 had decreases in  the CO-OP’s average monthly premium of more than $30, while the other  6 had increases or decreases of less than $30.
For 2016, the state-wide average premiums for silver health plans  increased from 2015 in 8 of 10 states where CO-OPs continue to operate.  (See appendixes II through XIV for more details on the range of  premiums in 2014, 2015, and 2016 for silver health plans in the states  where CO-OPs continued operate as of January 4, 2016.)
section_title: Average CO-OP Premiums in 2015 Were Generally Lower than those for Other Issuers
paragraphs: In the 23 states where CO-OPs offered health plans on the states’ health  insurance exchanges in 2015, our analysis showed that the average  monthly premiums for CO-OP health plans in all tiers were lower than the  average monthly premiums for other health plans for 30-year-old  individuals in most rating areas. CO-OPs offered bronze, silver, and  gold tier health plans in 94 percent of the rating areas where they offered  plans; they offered catastrophic and platinum tier health plans in fewer  rating areas. For all five tiers, the average premiums for CO-OP health  plans were lower than the average premiums for other health plans in  more than 75 percent of ratings areas where both a CO-OP and at least  one other issuer offered health plans. (See fig. 4.)
As shown in figure 4, the average monthly premiums for CO-OP health  plans in all tiers were lower than for other issuers in a higher percentage  of rating areas in 2015 than in 2014. Moreover, the number of ratings  areas where a CO-OP and at least one other issuer offered health plans,  and the number of rating areas where the average monthly CO-OP  premium was lower than the average monthly premium from other issuers  both increased from 2014 to 2015. As shown in figure 5, we found this  same pattern of premiums when we restricted our analysis to the states  where CO-OPs continued to operate as of January 4, 2016.
Although average CO-OP premiums for 30-year-old individuals were  lower than those of other insurers in most rating areas, the percentage of  rating areas where we found this difference varied substantially across  states for silver health plans.
In 10 states, the average monthly premium for CO-OP silver plans  was lower than for other silver plans in 100 percent of the states’  rating areas. Of these 10 states, CO-OPs continued to operate in 7 as  of January 4, 2016.
In two states where the CO-OPs did not offer silver plans in each  rating area, but continued to operate, the average premiums for  CO-OPs were lower than for other issuers in all of the rating areas  where the CO-OPs offered silver health plans.
For five states, the average premium for CO-OP silver health plans  was equal to or higher than for other silver plans in 50 percent of the  rating areas or more.
The percentage of rating areas where the average premium for CO-OP  silver plans was equal to or higher than for other silver plans tended to be  higher in the 11 states where CO-OPs no longer operate than in those  where CO-OPs continued to operate as of January 4, 2016. (See fig. 6  and appendixes II through XIV for more details on how the CO-OPs were  priced in relation to other health plans in each of the states where  CO-OPs continued to operate as of January 4, 2016.)
section_title: CO-OP Enrollment Doubled from 2014 to 2015, but Less than Half Was in CO-OPs Continuing in 2016, and Enrollment for Most CO-OPs Differed from Projections
paragraphs: The 22 CO-OPs that participated in the 2015 open enrollment period  together reported, as of June 30, 2015, enrollment of over 1 million— more than double the total enrollment reported at the same time the  previous year. Specifically, the 22 CO-OPs gained 610,420 net new  members, with all but one CO-OP experiencing an increase in  enrollment. The 11 CO-OPs that continued to operate as of January 4,  2016, reported about 391,855 in enrollment in 2015—representing about  38 percent of the combined CO-OP enrollment. Increases in enrollment  for these 11 CO-OPs ranged from 11,139 to 56,889. The 3 CO-OPs that  reported the largest enrollment as of June 30, 2015, are among those  CO-OPs that no longer operate. (See table 3.)
Overall, our analysis showed that CO-OPs’ combined enrollment for 2015  exceeded their projections by more than 6 percent, but half of the  CO-OPs did not meet or exceed their individual projections. As figure 7  shows, of the 11 CO-OPs that have ceased operations, 6 did not meet  their individual enrollment projections, while 5 CO-OPs exceeded their  projections. (See fig. 7.)
Further, of the 11 CO-OPs that continued to operate as of January 4,  2016, 6 exceeded their 2015 enrollment projections by June 30, 2015.  (See fig. 8.) Our analysis, however, also found that 4 CO-OPs had not yet  reached a program benchmark of enrolling at least 25,000 members.
According to CMS officials, exceeding this benchmark can be important  for CO-OPs, because that number of enrollees should better allow a  health insurance issuer to cover its fixed costs. CMS officials told us that  they are monitoring the CO-OPs’ enrollment with attention to this  benchmark.
section_title: Agency Comments
paragraphs: We provided a draft of this report to HHS for comment. In its written  comments, which appear in appendix XV, HHS stated its commitment to  CO-OP beneficiaries and taxpayers in managing the CO-OP program,  noted the achievements of the CO-OP program to date, and described  developments in the department’s oversight activities. In addition, HHS  stated its goal to help facilitate the acquisition of additional capital or the  development of other business relationships that could assist those  CO-OPs that continue to operate in achieving their goals and described  its efforts to support them. HHS also provided technical comments, which  we incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretary of Health  and Human Services and other interested parties. In addition, the report  will be available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix XVI.
section_title: Appendix I: Consumer Operated and Oriented Plans and Loan Awards
paragraphs: The Centers for Medicare & Medicaid Services awarded consumer  operated and oriented plan (CO-OP) program loans totaling more than  $2.4 billion, of which about $358 million was awarded for start-up loans  and about $2.1 billion was awarded for solvency loans. Table 4 provides  the total amounts awarded to each of the 23 CO-OPs established with  funds disbursed under the CO-OP program loans. As of January 4, 2016,  11 CO-OPs continued to operate while, 12 CO-OPs had ceased  operations.
section_title: Appendix II: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Connecticut
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Connecticut decreased from 2014 to 2015, but increased from 2015 to  2016. Specifically, the average decrease from 2014 to 2015 was about  $33, and the average increase from 2015 to 2016 was about $32. (See  table 5.)
For 2015, the CO-OP in Connecticut offered catastrophic, bronze, silver,  and gold health plans in each of the state’s eight rating areas, but did not  offer a platinum health plan. Figure 9 shows the percentile range in which  CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for health plans  offered by the CO-OP in Connecticut were generally among the most  expensive premiums for catastrophic health plans. For gold health plans,  the CO-OP’s premiums were among the least expensive or in the middle.  The CO-OP’s premiums for bronze and silver health plans were among  the least expensive premiums in some rating areas, while ranging from  the middle to among the most expensive premiums in others.
section_title: Appendix III: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Idaho
paragraphs: The consumer operated and oriented plans (CO-OP) from Montana  offered health plans on the Idaho health insurance exchange for the first  time in 2015. The state-wide average monthly premium for CO-OP silver  health plans for 30-year-old individuals increased from 2015 to 2016.  Specifically, the average increase was about $57. (See table 6.)
For 2015, the CO-OP in Idaho offered catastrophic, bronze, silver, and  gold health plans in each of the state’s seven rating areas, but offered  platinum health plans in only three. Figure 10 shows the percentile range  in which CO-OP monthly premiums for 30-year-old individuals fell after  rank-ordering all plans in each rating area. The premiums for health plans  offered by the CO-OP in Idaho were generally in the middle with  premiums in some rating areas ranging from the least expensive to the  middle.
section_title: Appendix IV: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Illinois
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Illinois decreased from 2014 to 2015, but increased from 2015 to 2016.  Specifically, the average decrease from 2014 to 2015 was about $80, and  the average increase from 2015 to 2016 was about $61. (See table 7.)
For 2015, the CO-OP in Illinois offered bronze, silver, and gold health  plans in each of the state’s 13 rating areas. The CO-OP offered platinum  health plans in three rating areas, but did not offer any catastrophic health  plans. Figure 11 shows the percentile range in which CO-OP monthly  premiums for 30-year-old individuals fell after rank-ordering all plans in  each rating area. The premiums for health plans offered by the CO-OP in  Illinois tended to be among the least expensive or in the middle.
section_title: Appendix V: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Maine
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Maine increased from 2014 to 2015, but decreased slightly from 2015 to  2016. Specifically, the average increase from 2014 to 2015 was about $8,  and the average decrease from 2015 to 2016 was about $1. (See table  8.)
For 2015, the CO-OP in Maine offered catastrophic, bronze, silver, and  gold health plans in each of the state’s four rating areas, but did not offer  a platinum health plan. Figure 12 shows the percentile range in which  CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for catastrophic,  silver, and bronze health plans offered by the CO-OP in Maine were  among the most expensive in some rating areas, the least expensive in  some, and in the middle in others. Premiums for gold health plans were  among the least expensive.
section_title: Appendix VI: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Maryland
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Maryland decreased from 2014 to 2015, but increased from 2015 to 2016.  Specifically, the average decrease from 2014 to 2015 was about $33, and  the average increase from 2015 to 2016 was about $18. (See table 9.)
For 2015, the CO-OP in Maryland offered bronze, silver, gold, and  platinum health plans in each of the state’s four rating areas, but did not  offer catastrophic health plans. Figure 13 shows the percentile range in  which CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for health plans  offered by the CO-OP in Maryland were generally in the middle.
section_title: Appendix VII: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Massachusetts
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Massachusetts decreased from 2014 to 2015, but increased from 2015 to  2016. Specifically, the average decrease from 2014 to 2015 was about  $19, and the average increase from 2015 to 2016 was about $7. (See  table 10.)
For 2015, the CO-OP in Massachusetts offered plans in all tiers in five of  the state’s seven rating areas. Figure 14 shows the percentile range in  which CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for health plans  offered by the CO-OP in Massachusetts were among the least expensive  across all tiers and rating areas.
section_title: Appendix VIII: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Montana
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Montana decreased from 2014 to 2015, but increased from 2015 to 2016.  Specifically, the average decrease from 2014 to 2015 was about $17, and  the average increase from 2015 to 2016 was about $75. (See table 11.)
For 2015, the CO-OP in Montana offered plans in all tiers in each of the  state’s four rating areas. Figure 15 shows the percentile range in which  CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The CO-OP premiums for  catastrophic health plans offered by the CO-OP in Montana were  generally in the middle. The CO-OP premiums were among the least  expensive premiums or in the middle for silver, gold, and platinum plans.  CO-OP premiums for bronze plans ranged from among the least to most  expensive.
section_title: Appendix IX: Premiums for the Consumer Operated and Oriented Plans Relative to Premiums for Other Health Plans in New Hampshire
paragraphs: The consumer operated and oriented plans (CO-OP) from Maine and  Massachusetts both offered health plans on the New Hampshire health  insurance exchange for the first time in 2015. The state-wide average  premiums for CO-OP silver health plans for 30-year-old individuals  increased from 2015 to 2016. Specifically, the average increase was  about $33. (See table 12.)
For 2015, CO-OPs in New Hampshire offered health plans in all tiers  except for platinum in the state’s single rating area. Figure 16 shows the  percentile range in which CO-OP monthly premiums for 30-year-old  individuals fell after rank-ordering all plans in the state’s single rating  area. The premiums for health plans offered by the two CO-OPs in New  Hampshire varied widely. CO-OP premiums for bronze, silver, and gold  health plans ranged from the least to the most expensive. Premiums for  catastrophic plans ranged from the middle to the most expensive.
section_title: Appendix X: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in New Jersey
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  New Jersey decreased from 2014 to 2015, but increased from 2015 to  2016. Specifically, the average decrease from 2014 to 2015 was about  $71 and the average increase from 2015 to 2016 was about $54. (See  table 13.)
For 2015, the CO-OP in New Jersey offered a health plan in all tiers in the  state’s single rating area. Figure 17 shows the percentile range in which  CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in the state’s single rating area. The premiums for the  health plans offered by the CO-OP in New Jersey were among the less  expensive premiums for bronze and silver health plans and in the middle  for catastrophic plans. CO-OP premiums for gold and platinum health  plans ranged from among the least to the most expensive.
Appendix X: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in New  Jersey Appendix X: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in New  Jersey Rating area 1 includes Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex,  Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem,  Somerset, Sussex, Union, and Warren counties.
section_title: Appendix XI: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in New Mexico
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  New Mexico decreased from 2014 to 2015 and decreased again from  2015 to 2016. Specifically, the average decrease from 2014 to 2015 was  about $9 and the average decrease from 2015 to 2016 was about $7.  (See table 14.)
For 2015, the CO-OP in New Mexico offered catastrophic, bronze, silver,  and gold health plans in each of the state’s five rating areas, but did not  offer a platinum health plan. Figure 18 shows the percentile range in  which CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for silver and gold  health plans offered by the CO-OP in New Mexico varied widely, ranging  from among the least to the most expensive premiums. CO-OP premiums  were often among the less expensive premiums for bronze health plans,  and were generally in the middle for catastrophic plans.
Appendix XI: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in New  Mexico Rating area 1 includes Bernalillo, Sandoval, Torrance, and Valencia counties.
Appendix XI: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in New  Mexico Rating area 2 includes San Juan County.
Rating area 3 includes Don Ana County.
Rating area 4 includes Santa Fe County.
Rating area 5 includes Catron, Chaves, Cibola, Colfax, Curry, DeBaca, Eddy, Grant, Guadalupe,  Harding, Hidalgo, Lea, Lincoln, Los Alamos, Luna, McKinley, Mora, Otero, Quay, Rio Arriba,  Roosevelt, San Miguel, Sierra, Socorro, Taos, and Union counties.
section_title: Appendix XII: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Ohio
paragraphs: The consumer operated and oriented plan (CO-OP) in Ohio offered health  plans on the state’s exchange for the first time in 2015. The state-wide  average monthly premium for CO-OP silver health plans for 30-year-old  individuals increased from 2015 to 2016. Specifically, the average  increase from 2015 to 2016 was about $43. (See table 15.)
For 2015, the CO-OP in Ohio offered catastrophic, bronze, silver, and  gold health plans in each of the state’s 17 rating areas, but did not offer a  platinum health plan. Figure 19 shows the percentile range in which  CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for health plans  offered by the CO-OP in Ohio were often in the middle or among the most  expensive premiums.
Appendix XII: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in Ohio Appendix XII: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in Ohio Rating area 1 includes Defiance, Fulton, Henry, Lucas, Williams, and Wood counties.
Rating area 2 includes Allen, Auglaize, Hancock, Hardin, Mercer, Paulding, Putnam, and Van Wert  counties.
Appendix XII: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in Ohio Rating area 3 includes Champaign, Clark, Darke, Greene, Miami, Montgomery, Preble, and Shelby  counties.
Rating area 4 includes Butler, Hamilton, and Warren counties.
Rating area 5 includes Adams, Brown, Clermont, Clinton, and Highland counties.
Rating area 6 includes Erie, Huron, Ottawa, Sandusky, Seneca, and Wyandot counties.
Rating area 7 includes Crawford and Richland counties.
Rating area 8 includes Marion and Morrow counties.
Rating area 9 includes Delaware, Fairfield, Fayette, Franklin, Knox, Licking, Logan, Madison,  Pickaway, and Union counties.
Rating area 10 includes Galia, Jackson, Lawrence, Pike, Ross, Scioto, and Vinton counties.
Rating area 11 includes Ashtabula, Cuyahoga, Geauga, Lake, and Lorain counties.
Rating area 12 includes Ashland, Medina, Portage, and Summit counties.
Rating area 13 includes Columbiana, Mahoning, and Trumbull counties.
Rating area 14 includes Holmes and Wayne counties.
Rating area 15 includes Carroll and Stark counties.
Rating area 16 includes Belmont, Coshocton, Guernsey, Harrison, Jefferson, Monroe, Morgan,  Muskingum, Noble, Perry, and Tuscarawas counties.
Rating area 17 includes Athens, Hocking, Meigs, and Washington counties.
section_title: Appendix XIII: Premiums for the Consumer Operated and Oriented Plans Relative to Premiums for Other Health Plans in Oregon
paragraphs: The state-wide average monthly premium for the two consumer operated  and oriented plans’ (CO-OP) silver health plans for 30-year-old individuals  in Oregon increased from 2014 to 2015 and, for the one CO-OP that  continued to operate in 2016, increased again from 2015 to 2016.  Specifically, the average increase from 2014 to 2015 was about $1, and  the average increase from 2015 to 2016 about $54. (See table 16.)
For 2015, the CO-OP in Oregon that continued to operate as of January  4, 2016, offered catastrophic, bronze, silver, and gold health plans in  each of the state’s seven rating areas, but offered no platinum health  plans. Figure 20 shows the percentile range in which CO-OP monthly  premiums for 30-year-old individuals fell after rank-ordering all plans in  each rating area. The premiums for bronze and silver health plans offered  by the CO-OP varied widely, ranging from among the least to the most  expensive premiums. The premiums for gold health plans tended to be in  the middle or among the most expensive premiums, except in rating area  1.
Appendix XIII: Premiums for the Consumer  Operated and Oriented Plans Relative to  Premiums for Other Health Plans in Oregon Rating area 1 includes Clackamas, Multnomah, Washington, and Yamhill counties.
Rating area 2 includes Benton, Lane, and Linn counties.
Rating area 3 includes Marion and Polk counties.
Appendix XIII: Premiums for the Consumer  Operated and Oriented Plans Relative to  Premiums for Other Health Plans in Oregon Rating area 4 includes Deschutes, Klamath, and Lake counties.
Rating area 5 includes Columbia, Coos, Curry, Lincoln, and Tillamook counties.
Rating area 6 includes Crook, Gilliam, Grant, Harney, Hood River, Jefferson, Malheur, Morrow,  Sherman, Umatilla, Union, Wallowa, Wasco, and Wheeler counties.
Rating area 7 includes Douglas, Jackson, and Josephine counties.
section_title: Appendix XIV: Premiums for the Consumer Operated and Oriented Plan Relative to Premiums for Other Health Plans in Wisconsin
paragraphs: The state-wide average monthly premium for the consumer operated and  oriented plan’s (CO-OP) silver health plans for 30-year-old individuals in  Wisconsin increased from 2014 to 2015 and increased again from 2015  to 2016. Specifically, the average increase from 2014 to 2015 was about  $19, and the average increase from 2015 to 2016 was about $25. (See  table 17.)
For 2015, the CO-OP in Wisconsin offered catastrophic, bronze, silver,  and gold health plans in 6 of the state’s 16 rating areas, but did not offer a  platinum health plan. Figure 21 shows the percentile range in which  CO-OP monthly premiums for 30-year-old individuals fell after rank- ordering all plans in each rating area. The premiums for catastrophic,  silver, and gold health plans offered by the CO-OP in Wisconsin varied  widely, ranging from among the least to the most expensive. The  premiums for bronze health plans tended to be among the least  expensive premiums.
Appendix XIV: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in Wisconsin Rating area 1 includes Milwaukee County.
Appendix XIV: Premiums for the Consumer  Operated and Oriented Plan Relative to  Premiums for Other Health Plans in Wisconsin Rating area 2 includes Dane County.
Rating area 3 includes Polk, Pierce, and St. Croix counties.
Rating area 4 includes Chippewa, Dunn, Eau Claire, and Pepin counties.
Rating area 5 includes Ashland, Bayfield, Burnett, Douglas, Sawyer, and Washburn counties.
Rating area 6 includes Buffalo, Jackson La Crosse, Monroe, and Trempealeau counties.
Rating area 7 includes Crawford, Grand, Iowa, LaFayette, and Vernon counties.
Rating area 8 includes Clark, Price, Rusk, and Taylor counties.
Rating area 9 includes Racine and Kenosha counties.
Rating area 10 includes Lincoln, Marathon, Portage, and Rusk counties.
Rating area 11 includes Calumet, Dodge, Fond du Lac, Sheboygan, and Winnebago counties.
Rating area 12 includes Ozaukee, Washington, and Waukesha counties.
Rating area 13 includes Florence, Forest, Iron, Langlade, Oneida, and Vilas counties.
Rating area 14 includes Columbia, Green, Jefferson, Rock, and Walworth counties.
Rating area 15 includes Adams, Green Lake, Juneau, Marquette, Richland, and Sauk counties.
Rating area 16 includes Brown, Door, Kewaunee, Manitowoc, Menominee, Oconto, and Shawano  counties.
section_title: Appendix XV: Comments from the Department of Health and Human Services
section_title: Appendix XVI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: John E. Dicken, (202) 512-7114 or dickenj@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Robert Copeland, Assistant  Director; Kristen Joan Anderson; Sandra George; Giselle Hicks; Aaron  Holling; and Drew Long made key contributions to this report.