The “community operated and oriented plans” program under the Affordable Care Act is tanking, with non-profits going out of business due to insufficiently priced premiums, a recent report said.
Currently, half of the insurance co-ops initiated in 2014 have closed shop, leaving behind $1.2 billion in unpaid federal loans.
To mitigate the situation, President Barack Obama called on Congress to revisit the “public option” in an article written for the Journal of the American Medical Association.
Obama argued the need for a “public option” in the provision of universal medical insurance in the US to provide competition to private insurers in the marketplaces set up by the law.
The public option is seen to make health insurance cheaper, while maintaining competitiveness in the marketplaces. In 2013, the Congressional Budget Office estimated that a public option would save $158 billion and offer premiums 7% to 8% lower than those of private insurers, thus serving as a benchmark for rates by motivating private carriers to remain competitive with reasonably priced premiums.
Over the years, providers have been pulling out of these marketplaces, citing the lack of a viable market, especially in rural areas where fewer individuals buy insurance and doctors cannot be convinced to practice.
This year, the country’s largest carrier, UnitedHealth announced it would pull out of most Affordable Care Act marketplaces for just those reasons. An estimated 650 counties could have just one insurer on the marketplace when open enrollment begins in October.
