The Blog

Danger for Health Co-ops

5:53 PM, Oct 23, 2013 • By DANIEL HALPER
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

The Washington Post reports:

When the new health-care law was being cobbled together, Congress decided to establish a network of nonprofit insurance companies aimed at bringing competition to the marketplace, long dominated by major insurers.

But these co-ops, started as a great hope for lowering insurance costs, are already in danger.

While the debut of the Affordable Care Act this month has been marred by widespread computer problems, the difficulties the co-ops face have been less obvious to consumers. One co-op, however, has closed, another is struggling, and at least nine more have been projected to have financial problems, according to internal government reviews and a federal audit.

Their failure would leave taxpayers potentially on the hook for nearly $1 billion in defaulted loans and rob the marketplace of the kind of competition they were supposed to create. And if they become insolvent, policyholders in at least half the states where the co-ops operate could be stuck with medical bills.

Recent Blog Posts

The Weekly Standard Archives

Browse 19 Years of the Weekly Standard

Old covers