Filed Under:Markets, Employee Benefits

Illinois group wins CO-OP health plan startup funding

A Chicago-based group with ties to Illinois health insurers and Illinois employers is getting $160 million in federal funding to start a new type of health insurer.

The group, Land of Lincoln Health Inc., will be using federal Consumer Operated and Oriented Plan program loans to organize a nonprofit, member-owned mutual health insurer that will sell coverage throughout the state.

Land of Lincoln Health is an arm of the Metropolitan Chicago Healthcare Council (MCHC). The council represents Chicago-area hospitals and hospital-affiliated health care delivery systems. The council's associate members include Humana and Blue Cross Blue Shield of Illinois.

Kevin Scanlan, the president of MCHC, is the chairman of the Land of Lincoln Health formation board.

The Land of Lincoln Health formation board also includes Laura Minzer. Minzer is the executive director of the Illinois Chamber of Commerce Healthcare Council.

"Availability of choice is a very important element to the small group health insurance market," Minzer said in a statement about the CO-OP funding approval announcement. "Consumer oriented and operated plans present the employer community with a great opportunity to address rising health care costs."

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the CO-OP program in an effort to increase the level of competition in the health insurance market. 

PPACA Section 1322 calls for CO-OP plans to sell coverage through the new PPACA health insurance exchanges, or Web-based health insurance supermarkets, and to get "substantially all" of their business from individuals and small groups.

The U.S. Department of Health and Human Services (HHS) is administering $3.8 billion in CO-OP startup loan funding.

HHS officials have approved a total of $1.8 billion in CO-OP program funding for CO-OP organizers in 24 states.

For now, at least, Land of Lincoln Health is the only organization with funding to start a CO-OP insurer in Illinois, according to MCHC officials. 

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