Health Insurance Co-ops May Take Too Long

Health Insurance Co-ops May Take Too Long in Politics and Legislation

As we were saying last week, health care reform is now entering the real wheelin’-and-dealin’ stage.

And the health care industry is not fooling around. According to the Wall Street Journal, it has hired more than 350 former government staff and members of Congress to lobby on their behalf. Not to mention political advertisements and grass-roots campaigns alike have been on full tilt.

From what we can tell, one of the first casualties may be the idea of health insurance cooperatives — which, until now, had seemed a plausible compromise.

Why? Apparently they take a painfully long time to form. How long? Decades. President Obama, now 47, would likely be in his 70s before co-ops could take root and compete with the private sector.

In an interview with Bloomberg, Paul Keckley, executive director of the Deloitte Center for Health Solutions called health insurance co-ops a “pretty neat concept”...  if we had 25 years and “weren’t staring down the barrel of a shotgun on health costs.”  Ouch.

He’s not the only one who thinks so. Michael Kreidler, Washington’s insurance commissioner, agreed. He also noted that Seattle-based Group Health, the oldest health-care co-op in the country, didn’t offer a noticeable discount on their 600,000 members’ premiums.

Senator Kent Conrad had introduced the possibility of co-ops as an alternative to a public option, which has been a sticking point with Republicans and even some Democrats. He envisioned statewide or regional nonprofits collectively owned by its members, who would be empowered to negotiate with local doctors and hospitals. A national board would bargain with drug companies for local affiliates.

In a lot of ways, the tug of war that will be constant until the August deadline won’t just be between one side or the other, it will be between realism and idealism.

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