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Utah’s 1st health insurance co-op is cleared for takeoff
Health reform » New breed of insurer offers lower rates, promise to deliver better care.


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Health co-ops garnered a lot of press during debate of the Affordable Care Act when proponents of a public option heralded them as the next best way to force insurance giants to be more answerable to consumers.

Congress set aside $6 billion in competitive grants and loans to fund them. Arches is one of the 24 across the country that won funding before the pool of money became a casualty in fiscal cliff negotiations.

At a glance

What is Arches?

Arches Community Health Care is a health co-op, a new nonprofit health insurer run by consumers.

The insurer is one of 24 in 24 states awarded a start-up loan by the Obama administration. It will begin enrolling customers in individual, family and small and large group policies on October 1, 2013. Coverage will begin January 1, 2014.

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Republicans questioned the solvency of co-ops; others say that’s a ruse promoted by big insurers who feared competition.

Regardless, Arches met "all the requirements that any insurance company has to meet to be licensed in Utah," primarily proof of solvency, said Jake Garn, chief financial examiner at the state Department of Insurance.

Arches is the first open-market health insurer to come along in at least six years, said Garn. Granite, a company set up to exclusively serve the LDS Church is the only other newly certified health insurer, he said.

If pressure is on to prove co-ops work, Arches also faces the same market uncertainty plaguing its competitors. Among the big questions still looming is how Utah’s health insurance exchange marketplace, or marketplaces, will work. Utah’s plan for its exchange awaits federal approval. Arches must by federal law sell its plans on exchanges.

"We’re operating under the assumption that the feds will be running it in Utah," said Baker.

Baker declined to describe more of the co-op’s "secret sauce" or disclose its enrollment goal for 2014.

"About this time next year," he said. "I’ll know whether I want to retire or not."


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