New insurer, Kentucky Health Cooperative, gets federal loan to expand into West Virginia, now needs state’s OK

Kentucky’s new, not-for-profit health insurer, the Kentucky Health Cooperative, has received approval for a federal loan that will allow it to expand into West Virginia and is seeking approval from the West Virginia insurance commissioner to move forward.

“This is great news and we are very excited about the possibility of offering health insurance plans in the Mountain State in 2015,” Janie Miller, CEO of  the co-op, said in a press release.

Health insurance cooperatives were created under federal health reform. They are based in individual states, but may operate in multiple states with approval from each state. Miller said if West Virginia insurance officials approve the request, “West Virginians would benefit from more health insurance choices.” She said the co-op will “operate with a strong consumer focus and greater plan accountability with the goal of offering high-quality, low-cost coordinated care.”

Health insurance cooperatives differ from publicly-traded corporations in that any extra money they collect must be used to “lower premiums, improve benefits,  improve the quality of health care delivered to members, repay federal loans and/or accumulate reasonable and sufficient reserves to provide for enrollment growth, financial stability and stable coverage for plan enrollees,” according to the release.

Miller said the expansion would benefit co-op members by giving it a larger member base and allowing it to spend less of its revenue on administrative overhead.

Kentucky and West Virginia have large rural populations that often seek their health care through cross-border providers, with provider networks already accounting for much cross-border activity, Joseph E. Smith, chairman of the co-op’s board of directors, said in the release.

The release said the federal Centers for Medicare and Medicaid Services supports expansion in states that face limited issuer competition in health insurance marketplaces. “Jason Butcher, public information specialist with the insurance commissioner’s office, said the competition would be welcome in the Mountain State,” reports Mandi Cardosi of The State Journal, a West Virginia weekly.

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