ObamaCare Co-ops: Cause Celebre or Costly Conundrum?

The Affordable Care Act created a new kind of “cooperative” health insurance arrangement heralded by supporters of health reform. The co-ops were founded on the idealistic belief that community members could band together to create health insurance companies that would be member-driven, service-oriented, and would not have to answer to shareholders or turn a profit. But the 23 co-ops that were created had significant start-up costs, no experiential data upon which to set premiums, generally had to pay extra to lease physician and hospital networks, and had few people in the companies and none on their boards with insurance experience.

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