The Obama administration is awarding loans totaling more than $638 million to start up new health care cooperatives serving eight states.

The government says the new nonprofit health insurers will be run by their customers and will be designed to offer coverage to individuals and small businesses.

Awards were announced Tuesday for co-ops serving Montana, Iowa, Nebraska, New Jersey, New Mexico, New York, Oregon and Wisconsin.

They are envisioned as a way to offer affordable coverage when President Barack Obama's health care reform law requires everyone to carry insurance.

Starting in 2014, millions of people now uninsured will buy private coverage in new state markets. The co-ops will compete in these state-run insurance exchanges.

Tax-credit subsidies will help customers with the cost of the insurance.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

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