801 Pennsylvania Ave., NW, Suite 715 PO Box 604 Washington DC 20044 202-333-2239; nashco.dc@gmail.

com

January 17, 2013 The Honorable Kathleen Sebelius Department of Health and Human Services 200 Independence Ave, SW Washington, DC 20201 Dear Secretary Sebelius: One of the central provisions of the Patient Protection & Affordable Care Act established a loan program to provide start-up capital to private, nonprofit health insurance CO-OPs in an effort to increase competition in the health insurance market, reduce costs for consumers, and encourage innovation that will improve patient outcomes. Additionally, CO-OPs will promote collaboration between providers, payers, and consumers while expanding coverage to the previouslyuninsured, including high-risk consumers and residents of rural and underserved areas. To date, 24 health insurance CO-OPS have signed loan agreements with your department and over 40 additional CO-OP development groups have submitted applications for loan funding. CO-OPs that have already signed funding agreements are not affected by this rescission and will play an essential part in improving the health care system in 24 states beginning next year. Residents of the 24 states which have funded CO-OPs can expect to soon begin seeing the benefits of increased competition. However, Congress took action last week which would deprive Americans living in the other 26 states and the District of Columbia of these benefits. The American Taxpayer Relief Act of 2012, a bill that primarily addressed issues associated with the fiscal cliff, also contained a provision that rescinded any unobligated funds in the loan program. CO-OP developers especially those who submitted applications by the December 31, 2012 deadline were dismayed that Congress would rush through a provision that undermines a foundational component of the Affordable Care Act and disregards the substantial time and money already invested by CO-OP developers who recently submitted applications. It was particularly shocking when you consider that the CBO estimates that the rescission will account for a reduction of only $200 million in budget outlays, an amount that pales in comparison to the premium cost savings that would be realized by consumers thanks to successful new CO-OP applicants. The importance of the competition provided by CO-OPs has never been more apparent; just this week, the New York Times reported that health insurers around the country

are seeking and winning double-digit increases in premiums as high as 26 percent. This rescission by Congress seriously undermines one of the American peoples most effective bulwarks against these rapidly increasing premiums. While we are surprised and deeply disappointed by this development, Americas health care COOPs are pushing forward with our goal of providing as many Americans as possible with quality, affordable health care starting in early 2014 when the exchanges become operational. The National Alliance of State Health CO-OPs, the CO-OP trade association, appreciates the productive relationship that we have enjoyed with HHS, and will continue to work closely with the Center for Consumer Information and Insurance Oversight. We ask that HHS take any available steps to support those CO-OPs which were abruptly cut off from the loan program, including working with Congress to restore funding. Thank you for your continued efforts to improve Americas health care system. We will continue to keep open the lines of communication between HHS and NASHCO, and look forward to working with the department to support our nations health care CO-OPs.

Sincerely,

John Morrison President, NASHCO

Janice S. VanRiper Executive Director and CEO, NASHCO

Brett Bby CEO, Coordinated Health Plans of Ohio Member of the Board, NASHCO

Linn Baker CEO, Arches Community Healthcare (Utah) Member of the Board, NASHCO

Dr. Peter Beilenson Evergreen Health Cooperative (Maryland) Member of the Board, NASHCO

Jerry Burgess CEO, Consumers Choice (South Carolina) CEO, Community Health Alliance (Tennessee) Member of the Board, NASHCO

Chuck Butler Member of the Board, NASHCO

Bob De Vita CEO, Common Ground Healthcare Cooperative (Wisconsin) Member of the Board, NASHCO

William Donahue Interim President, Land of Lincoln Health

Jerry Dworak CEO, Montana Health CO-OP Member of the Board, NASHCO

Tom Dwyer Acting CEO, Freelancers CO-OP of New Jersey Member of the Board, NASHCO

Jim Edwards Member of the Board, NASHCO

Allen Feezor Member of the Board, NASHCO

Terry Gardiner Member of the Board, NASHCO

Dr. Martin Hickey CEO, New Mexico Health Connections Member of the Board, NASHCO

Julia Hutchins CEO, Colorado Health Insurance Cooperative, Inc. Member of the Board, NASHCO

Ken Lalime CEO, HealthyCT (Connecticut) Member of the Board, NASHCO

Kevin Lewis CEO, Maine Community Health Options Member of the Board, NASHCO

Dennis Litos CEO, Consumers Mutual Insurance of Michigan Member of the Board, NASHCO

Dave Lyons CEO, CoOportunity Health (Iowa/Nebraska) Member of the Board, NASHCO

Janie Miller CEO, Kentucky Health Cooperative, Inc. Member of the Board, NASHCO

Richard Mittenberger Member of the Board, NASHCO

Kathleen Oestreich CEO, Compass Cooperative Health Network (Arizona) Member of the Board, NASHCO

Christine Oliver CEO, Vermont Health CO-OP Member of the Board, NASHCO

Tom Policelli Minuteman Health, Inc. (Massachusetts) Member of the Board, NASHCO

Ralph Prows CEO, Oregons Health CO-OP Member of the Board, NASHCO

Terry Shilling CEO, Louisiana Health Cooperative, Inc. Member of the Board, NASHCO

Tom Zumtobel CEO, Hospitality Health CO-OP (Nevada) Member of the Board, NASHCO