Purchasing cooperatives for small employers: Performance and prospects

Health insurance purchasing cooperatives were established in the early to m id-1990s for the purpose of making health insurance more affordable and acc essible for small employers. Extensive interviews at six cooperatives revea l that while some cooperatives enrolled large numbers of small employers, m ost have won only small market shares and a number have struggled for survi val, not always successfully. They have allowed small employers to offer in dividual employees choice of health plans, but none has been able to sustai n lower prices than are available in the conventional market. Among the imp ortant impediments to their success are limited support from health plans a nd conflicts over the role of insurance agents.