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CMS Offers $3.8 Billion in Co-Op Loans

By John Reichard, CQ HealthBeat Editor

July 29, 2011 -- The Centers for Medicare and Medicaid Services (CMS) posted an announcement Thursday that it’s offering $3.8 billion in loans under the health care overhaul to form consumer-run health care cooperatives.

CMS is making available $600 million in loans to help start the “consumer operated and oriented plans,” along with another $3.2 billion to help keep them solvent. The agency recently issued a proposed regulation on the creation of the entities, which are supposed to offer a more consumer-friendly alternative to for profit health plans.

CMS said in a notice to Capitol Hill staffers that applications for the first loans are due Oct. 17 and afterward are accepted quarterly until Dec. 31, 2012. The agency says it will award loans or otherwise respond within 75 days after the applicant is complete.

The health law (PL 111-148, PL 111-152) gives priority to applicants who want to establish statewide cooperatives.

The funding announcement says that “although it is not required, loan recipients are strongly encouraged to be operational by October 2013 so that on Jan. 1, 2014, they will be able to provide coverage to members enrolled through” state health insurance exchanges.

The agency tentatively plans to hold a teleconference Aug. 10 for those who want more information on the application process.

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