Case Management

News: CMS awards loan for Utah health insurance CO-OP

Case Management Weekly, August 15, 2012

CMS has awarded Aarches Community Health Care in Utah an $85.4 million loan to launch a new private nonprofit, consumer-governed health insurance company, called a consumer operated and oriented plan (CO-OP), the agency recently announced

CMS awards CO-OP loans only to private, nonprofit entities that demonstrate a high probability of financial viability. CMS selected the CO-OPs receiving loans based on an external independent review by a multidisciplinary team.  CMS previously awarded similar loans to organizations that plan to provide coverage in 16 other states. 

Created by the Patient Protection and Affordable Care Act, CO-OPs encourage eligible groups to create new, innovative and consumer–responsive health insurance companies to increase competition in the individual and small business markets.  

As consumer-operated insurers, CO-OPs will operate differently from traditional insurance companies. More than half of the board of directors must be customers or CO-OP members, and all directors must be elected by a majority vote of the members, improving accountability and transparency. CO-OP profits must go directly back to enrollees to lower premiums, expand benefits, or improve quality.

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