Every year, California strawberry farmer Mack Ramsay pores over health-insurance plans for his 35 employees, checking out prices, coverage, deductibles and other fine print from giants such as Blue Cross, Blue Shield and Aetna.

For 21 years he has chosen instead a little-known nonprofit health care cooperative based in Irvine, Calif., that provides insurance to about 15,000 Californians and Arizonans mostly working in agriculture.

Now, as Congress examines ways to overhaul the nation's health care system, the co-op is in the national spotlight as a model for a proposed co-op option consumers could consider along with private insurers.

United Agricultural Benefit Trust works like a commercial insurer, negotiating rates with a network of doctors and hospitals, but it is owned by members.

Many of them, like Ramsay, say co-ops offer better service and are cheaper because they don't have to turn a profit. Critics say co-ops, which are not as tightly regulated as other insurance providers, are susceptible to insolvency and wouldn't work on a large scale.

California Insurance Commissioner Steve Poizner said co-ops faced the same challenges as other insurance or shared-risk entities, but with one added vulnerability: If a whole industry is hit hard financially, that could ruin a co-op. But, he said, "with the correct oversight, they can be successful."

Co-ops are formed when groups of small-business owners band together and use strength in numbers to negotiate lower insurance premiums. The agricultural trust was founded in 1983 by farm and ranch owners who had struggled to find insurance for their laborers because providers were reluctant to insure migrant workers.

Co-ops are able to keep low rates because, unlike traditional insurers, they're exempt from taxes on premiums, said Mila Kofman, Maine's superintendent of insurance. Kofman, who has spent years studying co-ops, said they also are exempt from "assessments that fund state safety-net programs, such as guaranty funds, which pay claims when an insurer becomes insolvent."

Co-ops don't have that safety net.

In California, co-ops have a history of being unable to pay claims as a result of insufficient funding and inadequate reserves.

"Many times it becomes a question of whether the trust will be in business when you really need it," Kofman said.

Scores of California co-ops went out of business in the 1970s, '80s and '90s. Kofman points to Sunkist Growers and Packers Benefit Plan Trust, formerly based in Fresno, Calif., as an example. It was a licensed insurance co-op that covered about 23,000 people. When it fell into insolvency because claims outpaced income in 2001, employers and medical providers were left holding the bag for about $11 million in unpaid medical claims. People who lost coverage and needed treatment were left scrambling.

In the worst cases, co-ops were run by individuals who drained assets through administrative fees and embezzlement. Scandals led to tighter regulation.

United Agricultural Benefit Trust and other successful operations now file with California's Department of Insurance. However, there are still lower capital requirements, meaning they don't have to put as much money away as traditional insurers.

About 2,500 businesses buy insurance through the United Agricultural Benefit Trust. Employers like it because it's cheap. They say quotes from the co-op are generally 10 to 15 percent lower than those from bigger providers. And people in the co-op are essentially shareholders.