Obama calls for 'public option' for Obamacare

Bernie Sanders' plan for prescription drug prices
Bernie Sanders' plan for prescription drug prices

President Obama joined the chorus of Democrats calling for the creation of a government run health insurance program as Obamacare is facing growing problems.

In an article published Monday in the Journal of the American Medical Association, the president called for Congress to revisit the "public option" for Obamacare in areas where few insurers offer coverage.

"Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan," Obama wrote in the piece.

A public option would mean a government run health insurance plan.

"Adding a public plan in such areas would strengthen the marketplace approach, giving consumers more affordable options while also creating savings for the federal government," the president wrote.

Obama's call comes days after presumptive Democratic nominee Hillary Clinton voiced support for a public option, in a nod to supporters of Bernie Sanders, who wanted the federal government to take over providing health care coverage for all Americans.

Related: Hours before debate, Sanders releases Medicare-for-all plan

Some Democrats have long wanted to develop a government-sponsored health plan that would insure Americans under the age of 65, but they have never succeeded.

Instead, Obamacare funded the creation of non-profit co-op insurers to provide consumers with alternatives. But more than half of them have failed since their debut in 2014, undone mainly by enrollees' unexpectedly high medical use. Other insurers -- particularly UnitedHealthcare (UNH) -- have announced they are pulling out of Obamacare, further restricting consumers' choices.

Residents in 664 counties, most of them rural, may only have one insurer to choose from in 2017, according to a Kaiser Family Foundation review. That's up from 225 counties this year. Obama notes that 12% of enrollees live in areas with only one or two insurers.

Three years after Obamacare's exchanges opened for business, the program is facing challenges.

Many insurers found enrollees have higher health care needs than expected, forcing them to hike rates. A recent Kaiser study found the benchmark silver plan premiums are projected to rise 10% for 2017, on average, for a 40-year-old consumer in 14 major cities. That's double the 5% increase for 2016 policies, but it could change since state regulators often reduce insurers' rate requests.

Related: Insurers want to hike Obamacare premiums 10% for 2017

In the JAMA article, Obama made several other recommendations for improving Obamacare. He called on the 19 states who have not expanded Medicaid to do so and on Congress to increase financial assistance to make Obamacare coverage more affordable. And he said Congress should help reduce the cost of prescription drugs by requiring drug makers to disclose their production and development costs, increasing the rebates manufacturers must give for drugs prescribed to certain Medicare and Medicaid beneficiaries, and allowing the federal government to negotiate prices for certain high-cost medications.

The president hailed Obamacare for reducing the uninsured rate from 16% in 2010 to 9.1% in 2015 and providing more comprehensive coverage for millions of Americans. He also credited health reform for helping slow the growth rate of health care costs in recent years.

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