The Department of Health and Human Services has awarded the consumer oriented and operated plan (CO-OP) in Illinois, the Metropolitan Chicago Healthcare Council, with a $160 million loan to run the Land of Lincoln Health CO-OP.
About $3.8 billion is earmarked for CO-OPs in the Affordable Care Act, and so far HHS has awarded close to $2 billion in loans to 24 organizations. Envisioned as a low-cost alternative to current offerings and overseen by a division of CMS, CO-OPs are one of several new health plans the ACA is bringing to state insurance markets.
Kevin Scanlan, Metropolitan Chicago Healthcare Council CEO and chairman of the Land of Lincoln Health board, said the CO-OP "will redefine the insurance landscape" in Illinois, "providing consumers with reasonably-priced, patient-centered health insurance. This will ultimately change the way that patients, physicians and insurance providers work together in Illinois."
The healthcare council was one of four organizations applying for the CO-OP loan, which will help cover start-up costs and state licensing as a nonprofit mutual insurer, and the organization estimates it will cover about 20,000 Illinoisans.
The Land of Lincoln Health board includes representatives from a variety of mostly Chicago-area business, civic and healthcare groups, including the New Mount Pilgrim Missionary Baptist Church and the Instituto del Progreso Latino.
Illinois is one of seven states setting up a health insurance exchange in a partnership with the federal government, and the state, with some 280,000 small businesses, has one of the largest small group insurance markets in the country.
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Laura Minzer, Land of Lincoln Health board member and executive director of the Illinois Chamber of Commerce Healthcare Council, said the CO-OP "offers a new and vital option for small employers who will be pursuing group health coverage for their employees in this new world of health insurance in 2014."
"Availability of choice is a very important element to the small group health insurance market," Minzer said, adding that CO-OPs "present the employer community with a great opportunity to address rising health care costs."