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CO-OP Loans Go to Maine, Oregon, South Carolina Organizers

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The federal Center for Consumer Information and Insurance Oversight (CCIIO) is forging ahead with efforts to implement the Consumer Operated and Oriented Plan (CO-OP) provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA).

As the Supreme Court deliberated on the fate of the law, the CCIIO awarded three more CO-OP startup loans.

A total of about $207 million in new CO-OP loans went to Maine Community Health Options, Community Care of Oregon and Consumer’s Choice Health Insurance Company of South Carolina.

The drafters of PPACA created the CO-OP program in an effort to increase the level of competition in the health insurance market. PPACA Section 1322 calls for the CO-OP plans to sell coverage through the exchanges, or Web-based health insurance supermarkets, that PPACA is supposed to create, and to get “substantially all” of their business from 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, according to CCIIO officials.

Congress has allocated a total of $3.4 billion in CO-OP loan funding, and CCIIO officials are hoping entities will start CO-OP programs that will serve each state and the District of Columbia.

The CCIIO made its first round of CO-OP loan announcements in February. The agency issued about $639 million in loans to seven would-be CO-OP organizers.

The first application due date was Oct. 17, 2001, and the second was Jan. 3, 2012. The CCIIO will be taking more applications on a quarterly basis from now until the end of the year.

“CO-OP loans are only made to private, nonprofit entities that demonstrate a high probability of financial viability,” officials say.

To get access to the startup funds, the CO-OP organizers must meet developmental milestones, officials say.

One of the new recipients, Community of Care of Oregon, will get about $57 million to start Oregon’s Health CO-OP, a CO-OP that would serve all of Oregon. The CO-OP is sponsored by CareOregon, a nonprofit Medicaid managed care organization.

An affiliate of Freelancers Union, New York, already has received financing for efforts to start a CO-OP in Oregon.

Maine Community Health Options has received $62 million to set up a CO-OP that would serve all of Maine. The sponsor is Maine Primary Care Association, a group that represents Maine’s community, tribal, migrant, and homeless health centers.

Consumers’ Choice has received $88 million to set up a CO-OP that would serve all of South Carolina. CCIIO says Consumers’ Choice is sponsored by ”a dedicated team of volunteers from not-for-profit organizations, member-driven employer groups and business advocates with expertise in the South Carolina health care and insurance markets.”