CHAMPAIGN — Several local community organizations are looking into starting a member-owned, not-for-profit health insurance plan to cover people living in East Central Illinois.

They met earlier this week and determined a Consumer Operated and Oriented Plan, or CO-OP — a concept created under the federal Affordable Care Act — would need the participation of much broader base than just Champaign County, said Al Mytty, director of payor contracting at Carle.

CO-OPs are member-controlled, nonprofit insurance plans intended to focus primarily on the small-group and individual-insurance markets and serve as alternatives to the health insurance options people currently have available where they live, Mytty said.

"It would be another option in the marketplace," he said.

Carle, which owns Health Alliance Medical Plans, helped arrange the first CO-OP discussion — but wouldn't be leading a planning effort going forward, Mytty said.

Federal loan money is available under the Affordable Care Act for startup and solvency of CO-OP health plans. Congress approved $3.8 billion for the program, according to government fact sheet.

There would be a lot of work to do and not a lot of time to get it done if a CO-OP is going to be launched in this area, he warned. Organizations wishing to start a CO-OP must submit their applications by Dec. 31, 2012.

"The next step is to hold some additional meetings in Champaign-Urbana and a wider geographic area to further assess if there is interest," he said.

Several local organization leaders have expressed an interest in learning more and helping.

Among them is Sheila Ferguson, CEO at Community Elements.

Her not-for-profit mental health agency was initially going to face a 19 percent premium increase from Health Alliance Medical Plans for the upcoming year, and the increase was whittled down a bit to 15 percent — by raising deductibles for employees, she said.

"We are interested in talking more and learning more, because we just simply won't be able to keep going in the direction we're going. It's not feasible for us," she said. "Plus, there's still an increasing number of uninsured folks here who would like to see what this CO-OP would offer."

Valerie McWilliams, managing attorney for Land of Lincoln Legal Assistance Foundation, Champaign, was also at the meeting and expressed an interest, saying a CO-OP would offer more insurance choice.

Speaking for himself, personally, Mytty said he thinks this idea is worth exploring.

"I've always been interested in ways to make health insurance attractive and affordable," he said.

Claudia Lennhoff, executive director of Champaign County Health Care Consumers, said a CO-OP isn't a pipe dream — but she's not underestimating the amount of work it would take to make it a real insurance choice for this corner of Illinois.

"I think the potential is tremendous," she said.

Initially, such a plan might not come with a significant cost saving, because it would be difficult to convince health care providers to accept significantly lower rates for the care they provide than they're paid by commercial insurers, Lennhoff said. But the potential for savings over time are significant, because such a plan would be governed by and accountable to its members, she said.

In the current unregulated commercial market, insurers raise their rates, "because they can," she said.

Not only that, Lennhoff said, in the commercial insurance market, "look at how many contracts stand between you and your physician."

She uses the recent plight of her own organization as an example: Health Care Consumers' staff members largely see doctors at Christie Clinic, she said, and the organization renewed its health coverage contract with PersonalCare in October. Then, it found out just weeks later that Christie Clinic would no longer be in PersonalCare' provider network after Christie and PersonalCare severed most of their contractual relationship.

Provena's hospitals in Urbana and Danville are also interested in the CO-OP, though Provena Regional Chief Financial Officer Deb Schimerowski warns it's at a very early stage.

"But there are so many changes between Medicare, Medicaid and the commercial insurance world right now, we are looking at what other alternatives there are to help our local patients, and to help us, because there is such a need right now," she said.