Folks on Dailykos have been very upset that the public option seems to be being deleted from the Senate bipartisan package. I think a national public option is a great plan, but I believe Conrad is right that Coops can perform the same function and Dean, et al are wrong that they gut the effects of reform. Lets first review the reasons for a public option:
- A non profit does not have the evil incentives to deny coverage and raise premiums that private insurers do.
- A non profit will not pay its executives millions which should be going to lower premiums.
- A non profit will compete solely on price and will not spend 10-20% of its budget on marketing
- With the new mandate, private insurers are likely to take advantage of unsophisticated buyers
- A large plan will have substantial negotiating leverage with all vendors in the health care universe, driving down costs both by demanding discounts and by demanding best practices.
- We all hope a non profit plan will become sufficiently dominant to approach the cost savings provided by a single payer system.
All of these goals can be met by large coops
A large coop has:
- The same non profit motives and governance as a public plan. The lack of political interference could make it more efficient. This is the argument being had right now about taking Medicare reimbursement rates out of the political process.
- A large coop should have the same number of subscribers as a public plan and the same negotiating leverage. Infact, because it will not be subject to lobbying, it may be able to drive much better deals than a public plan would. ( See medicare part D rules against negotiating ). The key issue is size - the coops have to be very large, perhaps a maximum of 4 regional ones.
Coops have been very successful in many fields and compete effective against both private and public entities around the world. From Mutual insurance companies and Credit unions to Dairy coops and Ocean Spray - the model has been proven again and again.
Infact, In Israel, a system of coop health insurance works very well. It is composed of 4 large health insurance coops (started by unions) and has both an employer and an individual mandate.
http://en.wikipedia.org/...
The critical arguments against Coops are
- They will be too small and weak to be effective.
- They will not have sufficient start up capital or customer base to compete.
- Who will run them and how will we know they wont be shills for corporate interests.
The counter to these arguments is:
- Yes, if they are small and weak they will not work. State based coops as Daschel originally proposed will be too small to compete effective, particularly in small and poor states. The California Coop will have substantial purchasing power, the wyomning one less so. The coops will only work if the are very large, either a single national one or perhaps four regional coops. Demanding large coops is an accomplishable goal.
- The federal government will provide start up capital and the new mandates will flood the market with new buyers, a majority of whom will pick the cheapest option - which will be the coop. This should allow them to be both well capitalized and very large immediately.
- Since our elected officials are shills for corporate interests already, this seems a moot issue. The public plan is as likely to be run by a former United Health Care lobbyist as a coop is.