Foreshadowing Single-Payer Health Insurance


July 22, 2015 1:08PM

Despite its tremendous failures, SCOTUScare—ahem, Obamacare—remains “the law of the land.” Most people are familiar with the bigger aspects of the law such as the mandates to purchase insurance and the expansion of Medicaid at the state level. Yet, there is a lesser-known component that is imploding with little fanfare.

Obamacare created taxpayer-funded “consumer operated and oriented” (co-op) plans, which were to be established by the states to compete with private health insurance companies. As Grace-Marie Turner with the Galen Institute notes, these public insurance co-ops “were meant to appease disgruntled advocates of a single-payer” system who didn’t think Obamacare went far enough.

Tennessee was one of 23 states where public insurance co-ops were started with the help of significant federal dollars. Those on the far Left saw these co-ops as a way to showcase why government insurance would work better than private, profit-driven insurance.

Boy, were they wrong. To date, all but one of the 23 co-ops are hemorrhaging money, including our own. As Turner notes in a recent study:

“For the entire year of 2014, Tennessee’s [Community Health Alliance] co-op posted a net loss of more than $22 million, excluding risk corridor receivables.

The co-op has received more than $73 million in federal loans as of the end of last year. All of the federal loan funds originally awarded to the co-op now have been exhausted.”

 To grapple with this loss, state officials have frozen enrollment in the co-op. That’s good news for taxpayers. But more trouble is brewing for those already enrolled in the program. The co-op has asked state officials to approve a 33% increases in enrollees’ premiums next year.

During his recent visit to the Volunteer State, President Obama wagged his finger at state regulators for approving private insurance companies’ premium increases without questioning whether those rate hikes were justified. Funny he didn’t mention the public co-op in his sermon.

Although the co-op has lost millions in taxpayer money and is about to hit thousands of enrollees with massive premium increases, there is a silver lining. We now have two-dozen crystal clear examples of what single-payer health insurance would look like. And it’s hideous.