Freelancers Union says it hopes to help workers who need health coverage join together to “build collective security and mutual support, free from the tethers of the profit-drive health insurance industry.”
Freelancers Union, New York, a group that represents self-employed people, recently won a total of $340 million in loans from the U.S. Department of Health and Human Services (HHS). The group will use the money to set up Consumer Operated and Oriented Plans (CO-OPs) – nonprofit, member-owned and member-driven health plans — in New York, New Jersey and Oregon, officials say.
The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) allocated a total of $3.8 billion in startup funding for the CO-OP program in PPACA Section 1322.
The CO-OP provision creators said the program will increase the overall level of competition in the commercial health insurance market.
A CO-OP plan is supposed to sell coverage through the new PPACA health insurance exchange system and get “substantially all” of its business from sales of coverage to individuals and small groups. A CO-OP plan could operate in a whole state or in part of a state, or in multiple states.
A CO-OP would be licensed as an insurer in each state in which it operates. Although a CO-OP plan would offer coverage through the exchange system, it also could sell coverage outside of an exchange, HHS officials say. Program rules forbid for-profit health insurers from creating CO-OP plans or participating in CO-OP plan governance.