Colorado HealthOp, the only health cooperative in the state, recently shut down after a change in the federal budget cut its loan money.

A quick recap of how cooperatives came to be: A cooperative (a consumer-oriented and operated plan) is a nonprofit health insurance option. The theory is that with no profit motive, co-ops provide better coverage at lower rates and force other insurance companies to lower their prices, allowing more people to have coverage.

Julia Hutchins, CEO and founder of Colorado HealthOp says, “We started this company believing that consumers need a voice in healthcare.” The cooperative had the lowest rates on the exchange and provided good benefits, as well as incentives for policyholders to take care of their health.

“Everything was laid out really well… They were very proactive and would e-mail about my health. ‘Hey, I noticed you have asthma, here are some things you might want to know,” says Laura Mahony, Stapleton resident and one of the cooperative’s 80,000 policyholders until its recent closure.

From the beginning, critics said co-ops were doomed because they could not survive with low rates in the competitive marketplace. The cooperative was given 10 days to pull together funds after notice that it would not receive its expected federal loan. They had letters of intent for loans, but they did not have funds within the required deadline.