MILWAUKEE (AP) — Business leaders and community organizers in Milwaukee have formed a nonprofit health insurance company to provide coverage to small businesses and individuals.
Common Ground Healthcare Cooperative is one of 24 cooperatives being started nationwide with almost $2 billion in federal loans, the Milwaukee Journal Sentinel reported (http://bit.ly/1dBUJoc ).
Common Ground will focus on Milwaukee and eastern Wisconsin to start, selling coverage through the federally run online marketplace, or exchange, which opens Oct. 1.
The cooperative does not expect to have the lowest prices. Instead, Chairman Bob Connolly said it hopes to stand out by being a nonprofit run by its members.
"The difference is who we are, what we represent and what we stand for," Connolly said.
The cooperative is being started with up to $56.4 million in loans awarded under the Affordable Care Act. The money will go toward startup costs and meeting state requirements on reserves for insurance companies. It cannot be used for marketing, so the cooperative is relying on volunteers to get the word out by distributing fliers and talking to neighbors.
"How many people do you know that are going door-to-door telling their neighbors about health insurance?" Connolly asked a recent meeting of organizers.
The goal is to sign up 10,000 customers in the first year. Bob De Vita, Common Ground's chief executive officer, estimated the cooperative can break even with 20,000 to 30,000 customers.
Jim Wesp, owner of Kettle Moraine Hardwoods and vice president of Common Ground's board, said he was interested in the idea of a nonprofit because his company and five of its workers are paying about $50,000 a year for health coverage. He also liked the idea of a cooperative.
"As a member, I will have the ability to have some say in how the plan is run," Wesp said.
Common Ground is not the first nonprofit health insurance company in Wisconsin. Group Health Cooperative of South Central Wisconsin was started in the 1970s with a federal loan. It's former director, Larry Zanoni, was an early adviser to Common Ground.
"The best advice he gave us is to be persistent," De Vita said, "because people thought he was crazy."
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