Last month, Tennessee's lone health insurance cooperative, the Community Health Alliance, announced that it was closing up shop, leaving thousands of customers without insurance and many to question the reasons for the operation's demise. The Chattanooga Times Free Press delved into the many issues that have played a role in the short life of the Health Alliance, from computer system hiccups and other “problems typical to startups” to political factors, such as federal reimbursements that drastically fell short of expectations. The article observed that of the 23 original co-ops, the Alliance is one of nine that have folded, while noting that "a handful seem to be in good shape." In the piece, Mike Adelberg, senior director at FaegreBD Consulting, emphasized that the failed co-ops are not necessarily representative of all co-ops.
"Anywhere in the American economy, startups fail," Adelberg said. "When the dust settles the co-ops will be on a continuum from successful to failed. The next couple of years will tell us which end of the continuum most of them end up on."