N.J. nonprofit gets $100M loan to prepare insurance plans for state-run exchange

February 22. 2012 2:36PM

N.J. nonprofit gets $100M loan to prepare insurance plans for state-run exchange

A new private, nonprofit, consumer-directed health insurance group in New Jersey, sponsored by the Freelancers Union, has been awarded a loan of more than $100 million under the Affordable Care Act to set up and maintain affordable health plans for individuals and small businesses.

"The way people are receiving health insurance and care now is not sustainable," Freelancers Union President and CEO Sara Horowitz said. "Nonprofit (insurers) will be the future for how people get care in America. We look forward to moving away from a fee-for-service model and focus on integrated health care and (patient-centered) medical homes."

The Freelancers Consumer Oriented and Operated Plans of New Jersey is partnering with Piscataway-based QualCare Inc. to expand and connect its network of 8,500 independent workers in the state to health care providers.

"My vision for this co-op is to encourage competition in the industry and create a very unique alternative open to all individuals seeking care in the state," QualCare President and CEO Annette Catino said.

Beginning Jan. 1, 2014, the Freelancers Co-Op will offer health insurance plans through the new state-run competitive marketplace, formed by the ACA and known as an affordable insurance exchange. Under the conditions of the loan program, co-ops must comply with exchange rules and meet the same state requirements as similarly situated health insurance issuers to achieve licensure. The loan will fund the co-op's startup costs, which must be repaid at an interest rate of less than 1 percent within five years. The national program has a one-time $3.8 billion appropriation to support loans, $638.7 million of which has already been awarded to seven nonprofits in eight states.