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Monday, Nov. 4, 2013

Understanding Obamacare: New Insurance Options Will Drive Down Costs

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Question: How will Obamacare help promote competition in health care?

Answer: Obamacare, or the Affordable Care Act, helps make a number of paradigm shifts in the health-care marketplace, both at the provider level and the insurance level. Much of this is done by shifting market pressure in a positive direction. This is vital because competition between insurers alone won’t fix healthcare. For example, Minnesota has less than half the number of insurers Wisconsin does yet Minnesota’s insurance companies offer much lower rates.

What does matter is choice, especially the opportunity to choose new insurance options that did not exist a year ago. In Southeastern Wisconsin we will have a new choice, the Common Ground Healthcare Cooperative, to compete with the for-profit large insurance companies. When you become a member of the cooperative you will be able to vote for the board directors, and the profits of the cooperative go toward keeping rates low for members and providing quality coverage. For the first time, for-profit insurers in southeast Wisconsin will have to compete with member-driven insurance.

Obamacare created a loan program to spur these new options. As a result, health insurance cooperatives were established in 23 states. This funding is in the form of loans and must be repaid. Common Ground received a $56.4 million loan for its efforts to provide insurance in Wisconsin.

National media outlets are reporting that states that have a new cooperative are seeing lower premiums than those that don’t. And Wisconsinites know the power of cooperatives: We have farm cooperatives like FarmFirst Dairy Cooperative, grocery cooperatives like Outpost Natural Foods, and successful health cooperatives in other parts of Wisconsin, such as Group Health Cooperative in Madison and in Eau Claire.

Many health advocates were hoping for a “public option,” a reform that did not make it into the law. But these new options that were established in the Affordable Care Act will still present new opportunities. These co-ops will be much like credit unions in the banking sector. Don’t like your big bank? Go to a credit union. Don’t like your big insurance company? Check out the co-op.

Thanks Obamacare, for creating more choices.

—Robert Kraig, executive director, Citizen Action of Wisconsin

The Shepherd Express and Citizen Action of Wisconsin will answer questions about the Affordable Care Act during its implementation. Got a question? Email editor@shepex.com.