New cooperative will offer health insurance

From Burlington Free Press on June 25, 2012 Federal government provides a $33.8 million loan to help launch Vermont Health Co-op. Vermont has had dairy cooperatives since 1895 and its first food co-op, Adamant Cooperative Store, was established in 1935. It also is home to cooperatives providing electricity. Now a group wants to create the state’s first health insurance cooperative called Vermont Health Co-op. The federal government will give the initiative a big boost — a $33.8 million loan to cover startup costs and to fund a reserve to ensure the new insurer has enough money to pay claims. The Affordable Care Act, that politically controversial law whose fate could be d ecided next week by the U.S. Supreme Court, included a provision authorizing the creation of consumer owned and governed, non-profit health insurance cooperatives as a way to increase the options for individuals and small businesses. Mitchell Fleischer, chairman of the board launching the new cooperative, says Vermont, with its long tradition with cooperatives, seemed like a natural place to experiment with the health insurance cooperative concept outlined in the federal health reform law. “We think this is going to be very, very welcome in Vermont,” Fleischer said Friday. “We expect to carve out a niche.” “It is like your food co-op or electric co- op,” he added. “It is answerable to the people it serves.” As a cooperative, if income exceeds expenses, the profits will be returned to policy holders, either through expanded coverage or reduced premiums — and members will make those decisions. State officials and other insurers offered neutral comments Friday concerning the new endeavor, having not yet been privy to any details about the cooperative. The co- op, by federal law, couldn’t involve anyone associated with other insurance companies or with government. “It is not a surprise,” Health Reform Director Robin Lunge said of the announcement that a cooperative had been created and funded. “We knew it certainly was a possibility,” she said. “We are looking forward to seeing the application.”