The federal government approved plans for a new nonprofit organization to receive $75.8 million in federal funding to establish a nonprofit health insurance company under the Patient Protection and Affordable Care Act.

HealthyCT, the group created by two physicians associations, the Connecticut State Medical Society and CSMS-IPA, announced Friday that it will receive federal low-interest loans to create a Consumer Operated and Oriented Plan (CO-OP), which will serve individual and small group markets. It was one of 14 groups to receive funding.

“The physicians and consumers who believe that there is a better way to provide health insurance coverage to Connecticut patients are thrilled that we have cleared this major hurdle,” HealthyCT Board President David S. Katz, MD said in a press release. “This affirms our conviction that taking on this challenge is the right thing to do for the citizens of Connecticut.”

As a non-profit health insurer, any surplus funds HealthyCT derives would go back into the plan to help keep premiums stable and improve the quality of care, the press release states.

In its more than 400 page application the group noted that last year both individual and small group policies were concentrated under a small number of providers. Anthem, UnitedHealth, Aetna, ConnectiCare and Assurant carried 95 percent of individual policies. Meanwhile UnitedHealth, Anthem, ConnectiCare, Aetna and Cigna made up 99 percent of the small group market, it said.

Katz has previously said that consumers are clamoring for more choices.

The next hurdle for the group will be obtaining a license to offer health insurance from the Connecticut Insurance Department. Contingent on state approval, HealthyCT is expected to begin issuing insurance in October 2013.

HealthyCT can be found online at and on Facebook.