On February 21, 2012, CMS announced its first award of repayable loans to seven Consumer Operated and Oriented Plans (CO-OPs). The awards will help CO-OPs establish private, non-profit, consumer-governed health insurance companies with the goal of expanding health insurance options for consumers and small businesses. The CO-OPs will eventually operate in each states’ health insurance exchange under the Affordable Care Act, but will also offer plans outside of the exchange. Starting on January 1, 2014, the first seven CO-OPs will become operational in eight states.
They have been awarded a total of $638,677,300 in start-up and solvency loans, and CMS has announced that it is still reviewing applications submitted from the October 2011 deadline so additional awards will be announced on a rolling basis. The loan recipients are subject to strict requirements for audits, reporting, and monitoring with payback times of five years for start-up loans and fifteen years for solvency loans. CO-OP applications may still be submitted on a quarterly basis through December 31, 2012.