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CMS Proposes Standards for Nonprofit Health Insurance Plans

July 19, 2011
by root
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The Centers for Medicare & Medicare Services (CMS) took steps to encourage the creation of Consumer Operated and Oriented Plans (CO-OPs), new private non-profit, consumer-governed health insurance plans that will help increase competition and give consumers and small businesses additional affordable health insurance choices. CMS is proposing standards for CO-OPs, and for qualifying for $3.8 billion in repayable loans to help start-up and capitalize these new health plans. All CO-OP loans must be repaid with interest and loans will only be made to private, nonprofit entities that demonstrate a high probability of becoming financially viable.

CO-OPs are designed to give consumers and small businesses control over their own health insurance. CO-OPs are private, non-profit insurers governed by their members and offering affordable, consumer-friendly health insurance options. CO-OPs will use any profits to benefit its members, including actions to lower premiums, improve health benefits, improve the quality of members’ health care, expand enrollment, or otherwise contribute to the stability of coverage for members.

Working from the recommendations of the public advisory committee, the rules proposing the framework were developed with significant input from many stakeholders, including testimony at public meetings from consumers, small businesses and health care providers. The proposed rule is only a first step. CMS is taking public comment on the proposal and expects to release a Funding Opportunity Announcement regarding the availability of loans to start up CO-OPs soon.

For more information on this announcement, read the fact sheet at www.HealthCare.gov/news/factsheets/coops07182011a.html.

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