The health insurance co-ops are insurance carriers governed by consumers. Under provisions of the healthcare law, any entity that sold insurance in 2009 cannot become a co-op. The proposal also details that at least two-thirds of each co-op’s business should serve individuals and small businesses rather than large groups.
Steve Larsen, director of the U.S. Department of Health and Human Service’s office overseeing implementation of healthcare reform, told reporters this week that more than one-third of the planned loans could default. HHS is providing $600 million in loans to assist with co-op development; the other $3.2 billion will be used to backstop co-ops in the event of unexpected claims.
Because the co-ops are a new model, HHS predicts that up to 40 percent of planning loans and 35 percent of solvency loans could default.
Read the IFA Web News report on health insurance co-op loans.
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