The Rocky Mountain Farmers Union Foundation has incorporated the Colorado Health Insurance Cooperative, a new kind of nonprofit health insurer authorized under the Affordable Care Act.
The federal law allows sponsors to create Consumer Operated and Oriented Plans, or CO-OPs, designed to lower healthcare costs by eliminating insurance profits and requiring that the consumers of health care control the insurance company. Purchasers of the new nonprofit’s health insurance will be members of the cooperative and they will elect the board of directors. The co-op rules require that most of the board members be consumer-members, but the board will also include providers.
Prior to incorporating the new cooperative, the RMFU Foundation undertook a feasibility study, with grant funding from the Colorado Health Foundation and the U.S. Department of Agriculture. The study committee, working through the RMFU Foundation’s Cooperative Development Center, received assistance from many healthcare experts.
The next step for the new co-op is to seek federal loan money to provide the necessary capital for an insurer. “The Affordable Care Act loan program has bipartisan support, and it is modeled after the successful rural electric program which provided low-interest loans to assist new rural utility systems many decades ago,” said RMFU’s Director of Co-op Development, Bill Stevenson, “so we are confident that we can get funding.”
The Colorado Health Insurance Cooperative has submitted its loan application to the U.S. Department of Health and Human Services for review. Many individuals and organizations including the Colorado Medical Society have supported the application. The co-op’s interim board expects a positive response to the application by mid-summer.
The new co-op’s insurance plans will be sold through the Colorado Exchange as well as through insurance brokers, beginning on January 1, 2014. While conservative in its projections, the new co-op hopes to capture a growing share of the Colorado insurance market in the coming years.
“Health insurance co-ops can address many of the problems with traditional health care in the rural United States,” Stevenson said. “Our new co-op will focus on offering affordable health care to our rural communities.”