The Obama administration is working hard to convince supporters that the president is still fighting for a government-run health insurance plan open to all Americans. The scramble is to convince liberals that the president hasn’t already accepted the idea of a non-profit health care co-operatives — an alternative plan offered by moderate Democrats in the Senate. But with Americans increasingly resistant to the idea of a big, expensive plan, the co-op idea might be the only one that could survive in Congress. But could a co-op help solve the problems facing American health care?
What is a health cooperative?
Cooperatives are organizations formed by members, generally as nonprofits, to buy or negotiate health care services. Advocates say their size gives them buying power and flexibility, and can cut out the insurance company middleman between consumers and health care providers. Proponents like them in part because they are not government-run programs — although they would receive government loans and grants to get started.
Rural electric co-ops have often been referenced in the health debate. How do they work?
Co-ops have been used in the past to pay for and provide electricity in targeted rural areas — but membership in those groups was not voluntary. The rural electrification efforts of the early 20th century were heavily subsidized by the government. Through the decades, critics complained the rural electricity co-ops grew rich and corrupt, run by local boards without much government oversight.
The stated goal of Democratic health proposals is to reduce the cost of insurance. Could co-ops achieve that goal?
Not necessarily, and there is a great deal of risk involved. A key goal of creating a co-op is to keep costs down by eliminating profits, and forcing private insurers to reduce their costs in order to compete. Critics say co-ops generally lack the clout to bring down prices.
What would happen if co-ops didn’t bring prices down?
Some experts say the cost of joining a co-op often is no cheaper than paying for private, employer-provided health insurance. And if a co-op runs into management or other problems, its members could end up without coverage. In addition, lawmakers are considering setting aside about $6 billion in public funds as seed money for co-ops, which critics say is just another mutation of government-subsidized health care. Also, trigger mechanisms have been discussed to impose government-run plans if co-ops fail to deliver savings.
Health co-ops in Washington state and Wisconsin have been held up as examples of success. Could their success be practically replicated nationally?
Not likely. Such regional co-ops keep prices down in part by setting doctors’ salaries, rather than allowing caregivers to make money from patient visits and tests. Going national with the regional model would end with something more closely resembling a heavily regulated utility company.
The most common kinds of co-ops are designed to expand the marketing power of multiple producers — like orange growers. Would a health co-op allow smaller insurers to band together?
It’s a different model. As envisioned — and details are still in flux — health care co-ops would allow consumers to band together for the greater good. Because government has lately identified insurance companies as a key culprit in the nation’s health care crisis, the industry would likely be locked out of forming cooperatives to create bigger, for-profit entities.
