Washington Post Wonkblog - When Congress struck a deal to avert the fiscal cliff, it also dealt a quiet blow to President Obama’s health overhaul: The new law killed a multi billion-dollar program meant to boost health insurance competition by funding nonprofit health plans.
Obama signs his health-care reform bill into law.
The decision to end funding for the Consumer Operated and Oriented Plans has left as many as 40 start-ups vying for federal dollars in limbo. Some are considering legal action against the Obama administration, after many spent upwards of $100,000 preparing their applications.
The Consumer Operated and Oriented Plan, or CO-OP, program was aimed at spending as much as $6 billion to help launch nonprofit health insurance carriers. It came into favor with Democrats when it became clear that a government-run plan, known as the public option, could not gain enough political support.