By Elise Viebeck - 01/18/13 09:56 PM EST
The "cliff" deal hit a federal loan program designed to give CO-OPs a boost against traditional plans, with the goal of increasing competition and lowering insurance costs.
The $3.4 billion program was established by President Obama's signature healthcare law.
Just under $2 billion of its funding is obligated to 24 CO-OPs that have already signed loan agreements with HHS. The rest of its funding was cut earlier this month.
"While the existing 24 health insurance CO-OPs remain in a strong position to create new forms of high-quality and low-cost health insurance, we were very disappointed that the fiscal cliff agreement targeted future CO-OPs for little rhyme or reason," said NASHCO President John Morrison in a statement.
"NASHCO looks forward to working with Secretary Sebelius and members of Congress to ensure the CO-OP loan program achieves its goal of giving all Americans a member-owned and member-governed option for their health insurance," Morrison said.