Freelancers Union: Future Health Insurance Powerhouse?

Freelancers Union says it hopes to help workers who need health coverage join together to “build collective security and mutual support, free from the tethers of the profit-drive health insurance industry.”

Freelancers Union, New York, a group that represents self-employed people, recently won a total of $340 million in loans from the U.S. Department of Health and Human Services (HHS). The group will use the money to set up Consumer Operated and Oriented Plans (CO-OPs) – nonprofit, member-owned and member-driven health plans — in New York, New Jersey and Oregon, officials say.

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) allocated a total of $3.8 billion in startup funding for the CO-OP program in PPACA Section 1322. 

The CO-OP provision creators said the program will increase the overall level of competition in the commercial health insurance market.

A CO-OP plan is supposed to sell coverage through the new PPACA health insurance exchange system and get “substantially all” of its business from sales of coverage to individuals and small groups. A CO-OP plan could operate in a whole state or in part of a state, or in multiple states.

A CO-OP would be licensed as an insurer in each state in which it operates. Although a CO-OP plan would offer coverage through the exchange system, it also could sell coverage outside of an exchange, HHS officials say. Program rules forbid for-profit health insurers from creating CO-OP plans or participating in CO-OP plan governance.