States have lost out on co-ops

January 14, 2013

Fiscal cliff deal shuts down loan program meant to launch state-based co-op health plans; 26 states will miss out.


Healthcare’s geographic variation was made all the more patchy by the fiscal cliff deal struck on January 1. The deal abruptly shut down a loan program meant to launch state-based co-op health plans-before all the states could take advantage of it.

Twenty-six states have now missed out on any real chance of creating co-op health plans simply because of unfortunate timing, while 24 states are moving forward with the federal co-op loans they secured in 2012. The program was part of the Patient Protection and Affordable Care Act.

In Congress’ deal, a remaining balance of $1.9 billion was trimmed away from the $3.8 billion program. The federal government will not renege on the loans granted to co-ops previously, but the program has come to an end.

Co-ops are not-for-profit, member-run health plans that follow the same rules as other insurers; however, they must reinvest any excess revenue into benefits and lower premiums. The startups would most likely aim to compete on price inside and outside of the insurance exchanges. Each will need to earn a license from the state and set up a board of directors that includes plan members.

Co-op organizations without federal loans will have a difficult time finding other resources. Even the active plans aren’t guaranteed success once open enrollment begins, and they must pay back the federal loans between five and 15 years’ time, regardless. A 10% cushion was allowed in the fiscal cliff deal to cover the administrative costs for the existing loans.

Federal Loans for Co-ops

Compass Cooperative Health Network



Colorado Health Insurance Cooperative, Inc.






Land of Lincoln Health



CoOpportunity Health

Iowa and Nebraska


Kentucky Health Care Cooperative



Louisiana Health Cooperative, Inc.



Maine Community Health Options



Evergreen Health Cooperative Inc.



Minutemen Health, Inc.



Michigan Consumer’s Healthcare CO-OP



Montana Health Cooperative



Hospitality Health CO-OP



Freelancers CO-OP of New Jersey

New Jersey


New Mexico Health Connections

New Mexico


Freelancers Health Service Corporation

New York


Coordinated Health Plans of Ohio, Inc.



Freelancers CO-OP of Oregon



Oregon’s Health CO-OP



Consumers’ Choice Health Insurance Company

South Carolina


Community Health Alliance Mutual Insurance Company



Aarches Community Health Care



The Vermont Health CO-OP



Common Ground Healthcare Cooperative