Group Purchasing Arrangements

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Group purchasing arrangements (GPA) are public or private efforts to allow more than one small or large employer and/or individuals to pool together to collectively purchase health insurance. They seek to achieve lower cost premiums by bringing smaller groups together to achieve the buying power of large groups. Some GPAs are established through state legislation or regulation, while others are formed by associations of employers and/or individuals. There are a number of forms of GPAs, including association health plans (AHP), employer alliances or health insurance purchasing coalitions (HIPC), and multiple employer welfare arrangements (MEWA). Because most states either have a MEWA or have access to one from another state, MEWAs are not included in the coverage matrix. For more information on MEWAs, see the MEWA database at

Existing GPAs have expanded consumer choice, but there is little evidence that the current models have significantly reduced the number of uninsured.
[1]Furthermore, purchasing arrangements, in theory, could reduce administrative costs and give small groups bargaining clout, thereby reducing premiums. However, evidence suggests prices are comparable inside and outside the purchasing groups.[2] Still, purchasing arrangements continue to be of interest to both state and federal policymakers seeking to use the buying power of large groups to expand health insurance coverage.

GPAs may have an impact on the existing small group and non-group markets in a state so there are critical issues for state policymakers to consider, including:

  • What groups can come together to purchase insurance?
  • What state regulatory rules apply to them?
  • Will the regulatory rules (solvency, consumer protection, rate review) that apply to GPAs be similar to other insured groups?
  • What will the impact of GPAs be on the functioning of the overall state health insurance market?
  • What is the likely impact on the uninsured?


[1]Long, S. H. and M. S. Marquis. "Have Small-Group Health Insurance Purchasing Alliances Increased Coverage?" Health Affairs, January/February 2001.
[2]Government Accounting Office, "Private Health Insurance: Cooperatives Offer Small Employers Plan Choice and Market Prices," March 2000