PPACA establishes 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 CO-OPs are 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;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. In addition, PPACA directs CMS to prioritize the award of CO-OP loans to (2) the governing documents applicants that plan to offer qualified health plans statewide, plan to utilize integrated models of care, and have significant private support. Consistent with PPACA, CMS established two types of 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 approved indirect costs. After the initial disbursement of start-up loan funds, subsequent disbursements are to be made according to a disbursement schedule established in the loan agreement between CMS and each loan recipient. Subsequent disbursements are also contingent upon evidence demonstrating the loan recipient’s successful achievement of milestones also established as part of the loan agreement between CMS and each loan recipient. Milestones could include obtaining health insurance licensure and submitting timely reporting information in the required format. Loan recipients can coordinate with CMS to adjust the disbursement schedule and milestones as needed. Each disbursement for a start-up loan must be repaid within 5 years of the disbursement date. Solvency loans assist CO-OPs in meeting state insurance solvency CO-OPs may request disbursements for and reserve requirements.solvency loans “as needed” to meet states’ reserve capital and solvency requirements. Reasons for CO-OPs needing additional solvency disbursements could include enrollment growth and 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. The CO-OP program is a direct loan program. For a direct loan, the estimated long-term cost to the government—known as the credit subsidy cost—is calculated as the net present value of estimated cash flows over the life of each loan. Credit subsidy costs are estimated when the present value of estimated payments by the government (such as loan disbursements) exceeds the present value of estimated payments to the government (such as principal repayments, fees, interest payments, and recoveries). Credit subsidy costs are required to be covered by an appropriation. Therefore, if CMS awards a $10 million solvency loan to a CO-OP, the $10 million represents the payments by the government. If CMS calculates the present value for estimated payment to the government to be $6 million, the loan’s subsidy cost would be the net difference of $4 million and would need to be covered by the CO-OP appropriation. To ensure that applicants met the conditions for participating in the CO-OP program, CMS required applications for the CO-OP program loans to include information about organizational structure and governance, as well as provide bylaws, a business plan, and a feasibility study. CMS and a contractor reviewed applications. The contractor was responsible for evaluating applications and recommending loan amounts and a disbursement schedule based on information in the application package and supporting documents. When making the final decisions regarding the loan awards, CMS officials considered the contractors’ recommendations and other factors, including the size of the loan request and anticipated results of funding the application. By December 2012, CMS had awarded CO-OP program loans to 24 organizations. Several laws had the effect of reducing the $6 billion PPACA originally appropriated for the CO-OP program by about 65 percent and limiting program participation. In 2011, two separate appropriations acts rescinded $2.6 billion of the CO-OP appropriation. Additionally, in January 2013, the American Tax Payer Relief Act of 2012 rescinded another $1.3 billion of the unobligated CO-OP program appropriation, leaving about $1.1 billion of the original $6 billion CO-OP appropriation available for the credit subsidy costs of CO-OP program loan awards and The American Tax Payer Relief Act of CO-OP program administration.2012 also transferred any remaining appropriation to a contingency fund for providing assistance and oversight to CO-OP loan awardees, which essentially restricted CO-OP program participation to the 24 organizations that received CO-OP loan awards prior to January 2013. One organization in Vermont was unable to obtain a license as a health insurance issuer from its state’s insurance commissioner. As a result, CMS terminated the organization from the CO-OP program. Hampshire and the CO-OP from Montana expanded to Idaho, and all offered health plans on the exchanges of those states for the first time. (See fig. 1.) PPACA establishes rules governing how issuers can set premium rates. For example, while issuers are no longer able to 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 by which premiums may vary, known as rating areas.a low of 1 to a high of 67. Most states have 10 or fewer rating areas. The number of rating areas per state varies, ranging from 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 a proportion of allowable charges that a health plan is expected to pay on average, known as the actuarial value. Health plans within a metal level have the same actuarial value, meaning each plan pays approximately the same proportion of allowable charges as others. 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. While these plans are required to cover three primary care visits and preventive services at no cost prior to an enrollee reaching the plan’s deductible, they generally do not cover costs for other health care services until a high deductible is met. As of early January 2015, CMS has disbursed about $1.6 billion (64 percent) of the $2.4 billion in loans awarded to the 23 CO-OPs. Specifically, CMS has disbursed $351 million in start-up loans and $1.2 billion in solvency loans. The $351 million in start-up loan disbursements represents about 98 percent of the total amount of start-up loans awarded, whereas the $1.2 billion in solvency loan disbursements represents about 59 percent of the total amount of solvency loans awarded. (See fig. 2.) CMS has disbursed nearly all of the start-up loans awarded to the 23 CO-OPs. As figure 3 shows, disbursements to 11 CO-OPs equaled 100 percent of their start-up loan awards. Disbursements to the remaining 12 CO-OPs were more than 85 percent of awards. (See fig. 3.) In contrast to start-up loans, the percentage of awarded solvency loans disbursed to the 23 CO-OPs has varied depending on their needs. Disbursements to 3 of the 23 CO-OPs—CoOportunity Health, Kentucky Health Cooperative, Inc., and HealthyCT—equal 100 percent of their solvency loan awards. However, disbursements to 9 CO-OPs are less than 50 percent with disbursements to 2 CO-OPs—Land of Lincoln Health and Maine Community Health Options—being less than 30 percent of awards. The percentage of solvency loan funding disbursed to the remaining 11 CO-OPs ranged from 53 percent to 92 percent. (See fig. 4.) The percentages of solvency loan awards disbursed to CO-OPs reflect each CO-OP’s need for additional resources to meet state solvency and reserve requirements, which may be the result of enrollment growth or higher than anticipated claims from members. As of early January 2015, about $22 million of the CO-OP program appropriation was still available for obligation. According to CMS officials, the agency intends to use the remaining funds for administering the CO-OP program over the next few years. In the 22 states where CO-OPs offered health plans on the states’ health insurance exchanges in 2014, the average premiums for CO-OP health plans in all tiers were lower than the average premiums for other health plans in more than half of the rating areas. CO-OPs offered bronze, silver, and gold tier health plans in 91 percent of the rating areas, but offered catastrophic and platinum tier health plans in fewer rating areas. For 4 of 5 tiers, the average premiums for CO-OP health plans were lower than the average premiums for other health plans in 54 to 63 percent of rating areas where both a CO-OP and at least one other For platinum, the average premiums for issuer offered health plans.CO-OP health plans were lower than the average premium for other health plans in 89 percent of rating areas where CO-OPs and other issuers offered health plans. (See table 1.) The percentage of rating areas where the average premium for CO-OP health plans was lower than the average premium for other issuers varied significantly by each state and tier. (See fig. 5 for variation in silver plans and appendixes II through XXIII for more details on how CO-OPs in each state were priced in relation to other health plans.) For example, in six states the average premiums for CO-OP silver plans were higher than the average premiums for other silver plans in all the states’ rating areas where a CO-OP offered a plan. In five other states the average premiums for CO-OP silver plans were lower than the average premiums for other silver plans in all of the states’ rating areas where a CO-OP offered a plan. There was also variation across rating areas in the difference between the average premiums for CO-OP health plans and for other health plans. For example, for all rating areas in which CO-OPs offered silver tier health plans, average CO-OP premiums were priced between 10 and 30 percent lower in 31 percent of rating areas and between 10 and 30 percent higher in 21 percent of rating areas. CO-OP premiums were more than 30 percent lower in 4 percent of rating areas and more than 30 percent higher in 12 percent of rating areas. (See fig. 6.) The 22 CO-OPs that participated in the first open enrollment period enrolled over 469,000 (19 percent) of the nearly 2.5 million people who selected individual market health plans in states with CO-OPs. However, total enrollment was short of the overall projections of about 559,000 that CO-OPs included in their original loan applications and 8 CO-OPs accounted for about 385,000 (85 percent) of the total number of CO-OP enrollees. These 8 CO-OPs, in particular, exceeded their enrollment projections for the first open enrollment period with 5 more than doubling their projected enrollment. The remaining 14 CO-OPs did not meet their enrollment projections for the first enrollment period. And 10 of those CO-OPs enrolled less than half of their projected enrollment numbers. (See fig 7.) We provided a draft of this report to HHS for comment. In its written comments which appear in appendix XXIV, HHS stated its commitment to beneficiaries of the CO-OP program and taxpayers, and described various activities used to monitor the CO-OP program. The department 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 dsouzav@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 XXIV. Table 2 provides the total loan amounts awarded to each of the 23 consumer operated and oriented plans (CO-OP) as of January 2014. The consumer operated and oriented plans (CO-OP) in Arizona offered catastrophic, bronze, silver, and gold health plans in each of the state’s seven rating areas, but did not offer a platinum health plan. Figure 8 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Arizona tended to be among the most expensive premiums. (See fig. 8.) The consumer operated and oriented plans (CO-OP) in Colorado offered catastrophic, bronze, silver, and gold health plans in each of the state’s 11 rating areas, but did not offer a platinum health plan. Figure 9 compares CO-OP premiums to those of all other plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Colorado tended to be among the least expensive premiums. (See fig. 9.) The consumer operated and oriented plans (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 10 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Connecticut were among the most expensive premiums for catastrophic and silver health plans. For bronze health plans, the CO-OP’s premiums tended to vary widely within each rating area, generally ranging from the most expensive premium to among the least expensive. The CO-OP’s premiums for gold health plans varied in relation to other issuers’ premiums across the rating areas. (See fig. 10.) The consumer operated and oriented plan (CO-OP) in Illinois offered bronze, silver, and gold health plans in each of the state’s 13 rating areas, but did not offer catastrophic or platinum health plans. Figure 11 compares CO-OP premiums to those of all plans. Specifically, the figures show the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Illinois tended to be among the most expensive plans offered. However, in many rating areas, there was also a CO-OP offering that had a premium close to or below the middle. (See fig.11.) The consumer operated and oriented plan (CO-OP) in Iowa offered plans in all tiers in each of the state’s seven rating areas. Figure 12 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Iowa varied widely, ranging from the least to most expensive. (See fig. 12.) The consumer operated and oriented plan (CO-OP) in Kentucky offered plans in all tiers in each of the state’s eight rating areas. Figure 13 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Kentucky tended to be among the least expensive. However, in several rating areas, the CO-OP premiums were also among the most expensive premiums. (See fig. 13.) The consumer operated and oriented plan (CO-OP) in Louisiana offered plans in all tiers in each of the state’s eight rating areas. Figure 14 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Louisiana varied depending on the rating area and tier, ranging from among the least to the most expensive. (See fig. 14.) The consumer operated and oriented plan (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 15 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Maine were generally among the least expensive premiums. In rating area 1, however, CO-OP premiums ranged from the least to most expensive for silver health plans and were among the most expensive for catastrophic and bronze health plans. (See fig. 15.) The consumer operated and oriented plan (CO-OP) in Maryland offered bronze, silver, and gold health plans in each of the state’s four rating areas, but did not offer catastrophic or platinum health plans. Figure 16 compares CO-OP premiums to those of all plans. Specifically, it shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Maryland were among the most expensive premiums for bronze plans. However, the CO-OP premiums for silver and gold plans varied widely within each rating area, ranging from among the least to the most expensive premiums. (See fig. 16.) Appendix X: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Maryland Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix X: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Maryland Rating area 1 includes Anne Arundel, Baltimore, Baltimore City, Harford, and Howard counties. Rating area 2 includes Calvert, Caroline, Cecil, Charles, Dorchester, Kent, Queen Anne’s, Somerset, St. Mary’s, Talbot, Wicomico, and Worcester counties. Rating area 3 includes Montgomery and Prince George’s counties. Rating area 4 includes Allegany, Carroll, Frederick, Garrett, and Washington counties. The consumer operated and oriented plan (CO-OP) in Massachusetts offered plans in all tiers in 5 of the state’s 7 rating areas. Figure 17 compares CO-OP premiums to those of all plans. Specifically, it shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Massachusetts tended to be among the least expensive across all tiers and rating areas. (See fig. 17.) Appendix XI: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Massachusetts Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix XI: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Massachusetts Rating area 1 includes 3-digit zip codes 010, 011, 012, and 013. Rating area 2 includes 3-digit zip codes 014, 015, and 016. Rating area 3 includes 3-digit zip codes 017 and 020. Rating area 4 includes 3-digit zip codes 018 and 019. Rating area 5 includes 3-digit zip codes 021, 022, and 024. Rating area 6 includes 3-digit zip codes 023 and 027. Rating area 7 includes zip codes that begin with 025 and 026. The consumer operated and oriented plan (CO-OP) in Michigan offered catastrophic, bronze, silver, and gold health plans in 13 of the state’s 16 rating areas, but did not offer a platinum health plan. Figure 18 compares CO-OP premiums to those of all plans. Specifically, it shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Michigan tended to be the most expensive premiums. (See fig. 18.) Appendix XII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Michigan Appendix XII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Michigan Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix XII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Michigan Rating area 1 includes Monroe and Wayne counties. Rating area 2 includes Macomb and Oakland counties. Rating area 3 includes St. Clair County. Rating area 4 includes Lenawee and Washtenaw counties. Rating area 5 includes Genesee and Shiawassee counties. Rating area 6 includes Tuscola County. Rating area 7 includes Ingham and Jackson counties. Rating area 8 includes Arenac, Bay, Gratiot, and Saginaw counties. Rating area 9 includes Cass and Van Buren counties. Rating area 10 includes Branch, Calhoun, and Kalamazoo counties. Rating area 11 includes Allegan and Barry counties. Rating area 12 includes Ionia, Kent, Lake, Mason, Mecosta, Montcalm, Muskegon, Newaygo, Oceana, Osceola, and Ottawa counties. Rating area 13 includes Clare, Gladwin, Isabella, and Midland counties. Rating area 14 includes Antrim, Benzie, Charlevoix, Emmet, Grand Traverse, Kalkaska, Leelanau, Manistee, Missaukee, and Wexford counties. Rating area 15 includes Alcona, Alpena, Cheboygan, Chippewa, Crawford, Iosco, Mackinac, Montmorency, Ogemaw, Oscoda, Otsego, Presque Isle, and Roscommon counties. Rating area 16 includes Alger, Baraga, Delta, Dickinson, Gogebic, Houghton, Iron, Keweenaw, Luce, Marquette, Menominee, Ontonagon, and Schoolcraft counties. The consumer operated and oriented plan (CO-OP) in Montana offered plans in all tiers in each of the state’s four rating areas. Figure 19 compares CO-OP premiums to those of all plans. Specifically, it shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Montana were generally among the least expensive premiums for catastrophic and gold plans. CO-OP premiums for bronze and silver plans varied widely, ranging from among the least to most expensive. (See fig. 19.) Appendix XIII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Montana Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix XIII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Montana Rating area 1 includes Carbon, Musselshell, Stillwater, Sweet Grass and Yellowstone counties. Rating area 2 includes Broadwater, Cascade, Chouteau, Clark, Deer Lodge, Gallatin, Judith Basin, Lewis and Jefferson, Silver Bow, and Teton counties. Rating area 3 includes Flathead, Lake, and Missoula counties. Rating area 4 includes Beaverhead, Big Horn, Blaine, Carter, Custer, Daniels, Dawson, Fallon, Fergus, Garfield, Glacier, Golden Valley, Granite, Hill, Liberty, Lincoln, Madison, McCone, Meagher, Mineral, Park, Petroleum, Phillips, Pondera, Powder River, Powell, Prairie, Ravalli, Richland, Roosevelt, Rosebud, Sanders, Sheridan, Toole, Treasure, Valley, Wheatland, and Wibaux counties. The consumer operated and oriented plan (CO-OP) in Nebraska offered plans in all tiers in each of the state’s four rating areas. Figure 20 compares CO-OP premiums to those of all plans. Specifically, it shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OPs tended to be among the least expensive premiums, with some exceptions such as catastrophic plans in rating area 1. (See fig. 20.) Appendix XIV: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Nebraska Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix XIV: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Nebraska Rating area 1 includes 3-digit zip codes 680 and 681. Rating area 2 includes 3-digit zip codes 683, 684, and 685. Rating area 3 includes 3-digit zip codes 686, 687, 688, and 689. Rating area 4 includes 3-digit zip codes 690, 691, 692, and 693. The consumer operated and oriented plan (CO-OP) in Nevada offered catastrophic, bronze, silver, and gold health plans in each of the state’s four rating areas. Platinum plans were only offered in rating area 1. Figure 21 compares CO-OP premiums to those of all plans. Specifically, it shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Nevada varied depending on the tier and rating area. In rating areas 2 and 3, CO-OP premiums were among the most expensive. (See fig. 21.) Appendix XV: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Nevada Appendix XV: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Nevada Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Rating area 1 includes Clark and Nye counties. Rating area 2 includes Washoe County. Rating area 3 includes Carson City, Douglas, Lyon, and Storey counties. Rating area 4 includes Churchill, Esmeralda, Eureka, Humboldt, Lander, Lincoln, Elko, Mineral, Pershing, and White Pine counties. The consumer operated and oriented plan (CO-OP) in New Jersey offered a health plan in all tiers in the state’s single rating area. Figure 22 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for the health plans offered by the CO-OP in New Jersey were among the more expensive premiums for bronze and silver health plans and in the middle for catastrophic and gold plans. CO-OP premiums for platinum health plans were among the least expensive. (See fig. 22.) Appendix XVI: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in New Jersey Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix XVI: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums 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. The consumer operated and oriented plan (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 23 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in New Mexico were often among the less expensive premiums for bronze, silver, and gold health plans and were generally in the middle for catastrophic plans. (See fig. 23.) Appendix XVII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in New Mexico Appendix XVII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in New Mexico Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Rating area 1 includes Bernalillo, Sandoval, Torrance, and Valencia counties. 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. The consumer operated and oriented plan (CO-OP) in New York offered bronze, silver, gold, and platinum health plans in each of the state’s eight rating areas, but did not offer a catastrophic health plan. Figure 24 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP were consistently among the least expensive premiums across all eight rating areas in New York. (See fig. 24.) Appendix XVIII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in New York Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Appendix XVIII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in New York Rating area 1 includes Albany, Columbia, Fulton, Greene, Montgomery, Renesselaer, Saratoga, Schenectady, Schoharie, Warren, and Washington counties. Rating area 2 includes Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans, and Wyoming counties. Rating area 3 includes Delaware, Dutchess, Orange, Putnam, Sullivan, and Ulster counties. Rating area 4 includes Bronx, Queens, Kings, New York, Richmond, Rockland, and Westchester counties. Rating area 5 includes Livingston, Monroe, Ontario, Seneca, Wayne, and Yates counties. Rating area 6 includes Broome, Cayuga, Chemung, Cortland, Onondaga, Schuyler, Steuben, Tioga, and Tompkins counties. Rating area 7 includes Chenango, Clinton, Essex, Franklin, Hamilton, Herkimer, Jefferson, Lewis, Madison, Oneida, Oswego, Otsego, and St. Lawrence counties. Rating area 8 includes Nassau and Suffolk counties. The two consumer operated and oriented plans (CO-OP) in Oregon offered catastrophic, bronze, silver, and gold health plans in each of the state’s seven rating areas, but only platinum health plans in four rating areas. Figure 25 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OPs tended to vary widely, ranging from among the least to the most expensive premiums. (See fig. 25.) Appendix XIX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Oregon Appendix XIX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Oregon Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. 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. 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. The consumer operated and oriented plan (CO-OP) in South Carolina offered catastrophic, bronze, silver, and gold health plans in each of the state’s 46 rating areas, but did not offer a platinum health plan. Figure 26 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in South Carolina tended to be among the least expensive premiums. However, CO-OP premiums were among the most expensive premiums in some rating areas. (See fig. 26.) Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Appendix XX: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in South Carolina Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. The consumer operated and oriented plan (CO-OP) in Tennessee offered catastrophic, bronze, silver, and gold health plans in five of the state’s eight rating areas, but did not offer a platinum health plan. Figure 27 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Tennessee tended to be among the most expensive premiums. (See fig. 27.) Appendix XXI: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Tennessee Appendix XXI: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Tennessee Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Rating area 1 includes Carter, Greene, Hancock, Hawkins, Johnson, Sullivan, Unicoi, and Washington counties. Rating area 2 includes Anderson, Blount, Campbell, Claiborne, Cocke, Grainger, Hamblen, Jefferson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier, and Union counties. Rating area 3 includes Bledsoe, Bradley, Franklin, Grundy, Hamilton, Marion, McMinn, Meigs, Polk, Rhea, and Sequatchie counties. Rating area 4 includes Davidson, Montgomery, Robertson, Rutherford, Sumner, Trousdale, Williamson, and Wilson counties. Rating area 5 includes Benton, Carroll, Chester, Crockett, Decatur, Dyer, Gibson, Hardeman, Hardin, Henderson, Henry, Lake, Madison, McNairy, Obion, and Weakley counties. Rating area 6 includes Fayette, Haywood, Lauderdale, Shelby, and Tipton counties. Rating area 7 includes Cannon, Clay, Cumberland, DeKalb, Fentress, Jackson, Macon, Overton, Pickett, Putnam, Smith, Van Buren, Warren, and White counties. Rating area 8 includes Coffee, Dickson, Giles, Hickman, Houston, Humphreys, Lawrence, Lewis, Lincoln, Marshall, Maury, Moore, Perry, Stewart, and Wayne counties. The consumer operated and oriented plan (CO-OP) in Utah offered bronze, silver, and gold health plans in each of the state’s six rating areas, but did not offer a catastrophic or platinum health plan. Figure 28 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank- ordering all plans. The premiums for health plans offered by the CO-OP in Utah were among the least expensive premiums in three of the state’s six rating areas and tended to be in the middle for the other rating areas. (See fig. 28.) Appendix XXII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Utah Appendix XXII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Utah Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Rating area 1 includes Cache and Rich counties. Rating area 2 includes Box Elder, Davis, Morgan, Salt Lake, Summit, and Weber counties. Rating area 3 includes Tooele and Wasatch counties. Rating area 4 includes Utah County. Rating area 5 includes Iron and Washington counties. Rating area 6 includes Duchesne, Emery, Garfield, Grand, Juab, Kane, Millard, Piute, San Juan, Sanpete, Sevier, Uintah, and Wayne counties. The consumer operated and oriented plan (CO-OP) in Wisconsin offered catastrophic, bronze, silver, and gold health plans in six of the state’s 16 rating areas, but did not offer a platinum health plan. Figure 29 compares CO-OP premiums to those of all plans. Specifically, the figure shows the percentile range in which CO-OP premiums fell after rank-ordering all plans. The premiums for health plans offered by the CO-OP in Wisconsin tend be among the less expensive premiums. However, CO-OP premiums varied widely for silver health plans in rating areas 1, 9, and 12, ranging from among the least to the most expensive. (See fig. 29.) Appendix XXIII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Wisconsin Appendix XXIII: Consumer Operated and Oriented Plan Premiums Relative to Other Issuers’ Premiums in Wisconsin Plans in the same metal level have the same actuarial value. Catastrophic plans are not required to meet actuarial value targets, but must have actuarial values less than 60 percent. Rating area 1 includes Milwaukee County. 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. Vijay D’Souza, (202) 512-7114 or DsouzaV@gao.gov. In addition to the contact named above, Robert Copeland, Assistant Director; Dee Abasute; Sandra George; Giselle Hicks; Aaron Holling; Drew Long; and Christina Serna made key contributions to this report.

Summary: The Patient Protection and Affordable Care Act (PPACA) established the CO-OP loan program, which helped create 23 consumer-governed, nonprofit health insurance issuers known as CO-OPs. To foster the creation of the CO-OPs, PPACA authorized two types of loans: (1) start-up loans, which help cover the costs of establishing a CO-OP; and (2) solvency loans, which help meet states' solvency requirements associated with becoming a licensed health insurance issuer. While the program seeks to increase competition and improve accountability to members, questions have been raised about the effects CO-OPs will have on health insurance markets. GAO was asked to study the CO-OP program during 2014. This report examines (1) the status of the CO-OP program loans, (2) how CO-OP health plan premiums compare to the premiums of other health plans, and (3) enrollment in CO-OP health plans. GAO analyzed data from CMS and states; reviewed applicable statutes, regulations, guidance, and other documentation; and interviewed officials from CMS and seven CO-OPs that were selected based on the total amount of loans awarded, geographic region, and the type of health insurance exchange (i.e., federally facilitated or state-based exchange) operated in the state where the CO-OP offered health plans. In commenting on a draft of this report, the Department of Health and Human Services described activities used to monitor the CO-OP program and provided technical comments, which were incorporated as appropriate. As of January 2015, the Centers for Medicare & Medicaid Services (CMS)—the agency that administers and monitors the consumer operated and oriented plan (CO-OP) program—has disbursed about two thirds of the $2.4 billion in loans awarded to 23 CO-OPs. CMS has disbursed about $351 million in start-up loans and $1.2 billion in solvency loans. The percentage of start-up loan funding disbursed to CO-OPs equaled all, or nearly all, of their awards. However, the percentage of solvency loan funding disbursed varied depending on each CO-OP's need to meet state solvency and reserve requirements. Disbursements to three CO-OPs equaled 100 percent of their solvency awards, while disbursements to 20 other CO-OPs ranged from 26 to 92 percent of their awards. The average premiums for CO-OP health plans were lower than those for other issuers in more than half of the rating areas—geographical areas established by states and used, in part, by issuers to set premium rates—for the 22 states where CO-OPs participated in the exchange during 2014. As shown in the table below, for four of the five coverage tiers—standardized levels of coverage based on the portion of health care costs expected to be paid by the health plan—the average premiums for CO-OP health plans were lower than the average premiums for other health plans in 54 to 63 percent of these rating areas. In addition, there was variation across rating areas in the difference between the average premiums for CO-OPs and other plans. For example, average CO-OP premiums for silver health plans were priced between 0 and 10 percent lower in 20 percent of rating areas and between 10 and 30 percent lower in 31 percent. During the first open enrollment period (October 1, 2013, through March 31, 2014), the 22 participating CO-OPs enrolled over 470,000 people. However, the total was short of the overall projections included in the CO-OPs' original loan applications, and 8 of the 22 CO-OPs accounted for more than 85 percent of the total number of CO-OP enrollees. These 8 CO-OPs exceeded their enrollment projections with 5 more than doubling their projected enrollment. The remaining 14 did not meet their enrollment projections. Ten of those CO-OPs enrolled less than half of their projected enrollment numbers. Officials from the CO-OPs GAO interviewed cited relatively high premiums, for example, as a reason for lower than projected enrollment levels.