CoOportunity Health, a nonprofit health insurance cooperative based in Des Moines, Iowa, has had a front-row seat to the ups and downs of healthcare.gov, the federal exchange website that got off to a notoriously poor start.

With the fixes to the federal website, CoOportunity officials report that the exchange enrollment numbers are improving rapidly.

“We’ve been enrolling about 500 a day over the past three days,” Cliff Gold, chief operating officer for CoOportunity, said on Dec. 6. “We’ve had more people sign up this week than we had in the entire month of October. The federal website is clearly working better.”

Since Iowa is one of the 34 states that rely on the federal website for enrollment, the co-op’s vibrant, user-friendly website signed up only a handful of consumers in the first weeks of enrollment. But CoOportunity’s secret weapons were insurance products sold outside the exchange—products that have been welcomed by small businesses struggling with limited insurance options in the largely rural state. And with the fixes to healthcare.gov, enrollment on the exchange is also picking up.

The health insurance co-op model, once seen as an alternative to the “public option” concept for proponents of health care reform, has not fared well in some states. Pressure from budget concerns and congressional supporters of traditional insurance plans have resulted in measures that reduced funding and increased regulations for co-ops since the passage of the ACA.

But the Iowa co-op has weathered the storm, in part because the former health plan officials who founded the co-op took a couple of crucial steps: they recognized that selling private, off-the-exchange plans to small businesses would be an important market; and they farmed the plan’s complicated administrative services out to Minneapolis-based HealthPartners, an established nonprofit insurer with a strong business infrastructure already in place.

So even though the Washington Post was all but writing the obituary for ACA co-ops in October, CoOportunity officials have remained optimistic they will hit their long-term enrollment goals of 25,000 members over three years. Key to that is the early interest from small businesses in Iowa and Nebraska, the two states where CoOportunity is licensed. A large part of the 6,000 members already enrolled with the co-op comes from small companies buying CoOportunity’s private-market plans, which company officials said reflects a history of unfulfilled demand in the marketplace.

“Iowa and Nebraska both had among the least competitive health insurance markets in the country due to the heavy concentration of one or two insurers,” said Gold. “There was a need for a nonprofit insurer that could offer affordable coverage with low administrative costs and without a profit motive.  There’s been little innovation in these markets for years, and we felt that a new carrier could be a change agent for the health insurance system.”

For the near future, the co-op has bolstered its reach with several key partnerships, including a marketing arrangement with credit unions in the two states, and it uses the University of Iowa Health Alliance as part of its provider network. But the relationship with HealthPartners may be the most important.
Scott Aebischer, senior vice president of customer service and product innovation with HealthPartners, says that by letting HealthPartners handle administrative chores such as billing and customer service, CoOportunity officials can focus on marketing and building relationships with the community. He praises the way CoOportunity has introduced itself to the market.

“They’ve been really great at getting it all laid out as we’ve been working on the core infrastructure,” Aebischer says. “They’ve built strong provider relationships. They’ve been very thoughtful in what they’re offering.”