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A small local insurance company will receive federal loans to serve low-income people in the region who make too much to be on Medicaid, but too little to purchase regular health coverage.

The Free-Lancers Union currently insures 23,000 members in New York. Sara Horowitz, founder and president of the union, said under the Affordable Care Act, a $340 million loan announced Tuesday will allow the group to expand into New Jersey and Oregon and offer relatively affordable insurance to more than 160,000 people.

"The Obama administration, as part of health reform, has provided real seed capital," Horowitz said, "that is not like private equity, where you have to pay back like a gazillion dollars in five minutes, but is actually quite patient."

The Free-lancers Union’s new product is scheduled to debut at the start of 2014.

The group is receiving three out of seven loans made nationwide as part of an initiative to charter new non-profit insurance companies.

Unlike its current insurance, the new coverage would target individuals whose income is 400 percent of the national poverty level or less. These people are eligible for the federal subsidies that are a key part of expanding coverage under the Affordable Care Act.