Premium ContentMouse over Home then click on Premium Content for information.Midwest Members Health, a new health insurance cooperative for Iowa and Nebraska, will receive a $112 million federal loan to pay startup costs and provide initial financial backing under the federal Patient Protection and Affordable Care Act.
The health care reform law, enacted in 2010, encourages the formation of nonprofit health insurance cooperatives, governed by their members, to compete with other insurers. The Iowa-Nebraska group is one of the first to receive operating approval under the law.
Organizers of Midwest Members Health are David Lyons, former Iowa insurance commissioner and CEO of the Iowa Institute in Des Moines; Cliff Gold, a former senior executive with Blue Cross Blue Shield in Iowa and CEO of Cliff's Edge Strategies; and Stephen Ringlee of Ames, Iowa, a venture capitalist.
Gold said Tuesday that the plan is to begin selling insurance by October 2013 and begin coverage by Jan. 1, 2014, using the medical provider network of Midlands Choice of Omaha, which is owned by hospitals in Nebraska and Iowa. The cooperative will have its headquarters in the Des Moines area and a presence in Omaha, he said, and employ between 20 and 50 people by the time it begins coverage.
The government also announced loan approvals for cooperatives in New York, New Jersey, Oregon, New Mexico, Montana and the city of Milwaukee. Other proposals are pending.
Gold said the co-op's initial target would be uninsured individuals and small businesses that do not offer coverage, expanding later to large employer groups and individuals who already have coverage. Of the federal loan, about $14 million is for startup costs and the additional $98 million is for "solvency," to provide the reserves needed to begin offering coverage. Gains from the cooperative's operations are to pay back the loan.
Health insurance exchanges — or one-stop shops to be formed in each state to give people a way to compare and buy private health insurance or enroll in Medicaid if they are eligible — will be required under the federal law to offer the cooperative's insurance, Gold said. The cooperative also will sell coverage outside the exchanges.
Gold said the cooperative would have affordable insurance options, low administrative costs and competitive medical costs. Because Omaha is a health care magnet for western Iowa, he said, it makes sense for the cooperative to operate in both states.
Similar cooperatives in the Minneapolis and Seattle markets operate successfully, he said, and offer alternatives in communities where a few health insurers dominate the market. HealthPartners, a cooperatively governed insurer in Minneapolis, will provide administrative and management services to Midwest Members.
Although the federal health care law has been at the center of political disputes, Gold said, the cooperative provision has had bipartisan support because it offers new competition, creates jobs and promises to lower consumers' costs.
Groups supporting the cooperative's application for the federal loan are the Iowa Institute of Cooperatives, the Iowa chapter of AARP, the Iowa Credit Union League and the Nebraska and Iowa Academies of Family Physicians.
Contact the writer:
402-444-1080, steve.jordon@owh.com
twitter.com/buffettOWH
Copyright ©2012 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
