The biggest question is of course: Will Congress enact a public health insurance plan?
If not, there’s now an alternative. Last week, the U.S. Senate Finance Committee offered the idea of health insurance cooperatives to take the place of that pesky “public ” health insurance plan idea.
U.S. Senator Kent Conrad, the Finance Committee member who proposed the co-ops, said it was designed mostly to compromise with Republicans who are so adamantly against a public plan.
According to a Time Magazine article, 50 separate cooperatives would be created for each of the 50 states.
Because the co-ops would be required to self-insure by covering the cost of claims entirely with premiums paid by members, the name of the game would be volume. The more members a cooperative had to pay premiums, the easier they’d be able to keep costs low. Lower population states would be able to join with other states nearby to form regional cooperatives.
To start up the co-ops, the government would initially have to kick in some $4 billion.
But unfortunately for this back-up plan, there’s been little success with health insurance cooperatives, according to the Time article.
Most cooperatives have a hard time staying financially solvent and keeping its members and providers happy. The two exceptions are Seattle’s Group Health and Minneapolis’ Health Partners. Both have enjoyed success largely because they provide both health insurance and health care services — with their own networks of physicians, hospitals, and clinics.
Unless the government can execute the co-op idea perfectly, it could easily crash and burn. Politically speaking, co-ops might seem less controversial, but without confidence in a solid plan, it too could just be a pipe dream.
So far, it doesn’t look like co-ops are the answer.