'Public Option' or Co-Op? Experts Sound Off

Carey explained that state-based co-ops would have "local responsiveness," but would have a difficult time competing with large health insurers and would therefore be ineffective at driving down insurance costs.

"We do have a long history of co-ops in the U.S., but their role has been somewhat limited. Group Health Cooperative of Puget Sound is the most frequently cited example, and has a track record of community responsiveness, high quality care, and solvency," said Carey.

The Co-Op: A Healthy Alternative?

While a few, small, non-profit co-ops have been successful, many doctors worried that the country lacked funds to build a nonprofit system enough to compete with private health insurers.

"A lot depends on the details of how the coops are set up (federal, state or local level) and the regulatory environment that is created by the health reform legislation," said Pauline Vaillancourt Rosenau, a professor at the University of Texas Health Science Center School of Public Health in Houston.

"Obtaining start-up funds and building an infrastructure from scratch may be insurmountable obstacles," she said.

Even if the government did find the funds to set up co-ops, other doctors worried that the nonprofit co-ops would want to become private insurance companies like successful co-ops before them.

"We once had private nonprofit insurance cooperatives. They were called Blue Cross Blue Shield -- legally owned by their members and therefore coops really," said Uwe Reinhardt, a professor of Economics and Public Affairs at Princeton University.

"Most of them have gone for profit on the ground that, to compete with commercial insurers, they must have access to the public equity market. That's the ostensible rationale, which I found unconvincing. These entities are so cash rich that they hardly ever need to go to the equity market to sell equity in return for cash," he said.

Reinhardt predicted that if Congress sets up co-op insurers, in a few years "their executives will clamor to convert them to regular commercial insurers, like Aetna and WellPoint."

"One does not have to be a cynic to see that one coming," he said.

In the meantime, America is waiting for Congress to return from the August recess.

ABC News' Dan Childs contributed to this report.

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