The CMS has provided seven not-for-profit organizations a total of about $639 million in repayable loans to establish not-for-profit, consumer-governed health insurance companies, a type of plan that was created by the Patient Protection and Affordable Care Act.

Funded through the 2010 law, the co-op plans are intended to be directed by customers and designed to give both individuals and small businesses more health insurance options. The co-ops will be able to offer health plans through the insurance exchanges that are scheduled to begin on Jan. 1, 2014. On Tuesday, the CMS announced that seven organizations in eight states have been granted loans. According to the CMS, all co-op loans must be repaid with interest and can only be made to private, not-for-profit organizations that are able to prove they are financially viable.

The first loan applications were due on Oct. 17, and the agency is still reviewing those proposals and will grant additional awards. Today's recipients include Common Ground Healthcare Cooperative, Freelancers Co-op of New Jersey, Freelancers Co-op of Oregon, Freelancers Health Service Corp., Midwest Members Health, Montana Health Cooperative and New Mexico Connections.

These co-ops will begin operating in Iowa, Montana, Nebraska, New Jersey, New Mexico, New York, Oregon and Wisconsin starting in 2014.

Meanwhile, a second round of applications was due on Jan. 3.