A co-op for the public option? Let's talk principles.
Posted on June 12th, 2009 by Jason Rosenbaum in Congress Watch
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We're going to see a lot of these kinds of "compromises" from now until we pass a health reform bill through Congress. First, we had the "trigger" proposal, designed to effectively kill a public health insurance option. Now, we have the "co-op" proposal.
It's not particularly useful to keep responding individually to these ideas - we'd be playing whack-a-mole for months. Instead, let's lay out some principles for a strong public health insurance option. If any proposal meets these principles, no matter what you call it, it is worthy of support.
- National and available everywhere: A strong public health insurance option will be a national public health insurance program, available in all areas of the country. The insurance industry is made of of conglomerates that have national reach. In order to have the clout to compete with the insurance industry and keep them honest, the public health insurance option must be national as well.
- Government appointed and accountable: The entire problem with private health insurance is that they aren't accountable to you or me. A public health insurance option must have a different incentive. A public health insurance option doesn't have to be a government entity necessarily, but its decision makers must be appointed by government and must be accountable to government.
- Bargaining clout: The whole point of health reform is to lower health care costs. Clearly, the insurance industry has failed to lower costs when left to their own devices. As the President says, we need a strong public health insurance option to lower rates, change the incentives in our health care system, and keep the industry honest.
- Ready on day one: The private health insurance industry has utterly failed to control health care costs or provide their customers the quality they've paid through the nose for. With one person going bankrupt every 30 seconds due to health care costs, we cannot afford to wait any longer for a real fix. We need the public health insurance option to start lowering prices now. That means no trigger.
Judging from the reports I've seen on Senator Conrad's proposal, a co-op as currently envisioned does not meet these principles. Here is why, in Senator Conrad's words:
And for those against a public option because they fear government control, the co-op structure has some appeal because its not government control. It's membership control, and membership ownership.
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What you probably need is a national entity with state affiliates, and the further flexibility so those states can have regional pools. So in our part of the country, you might have North Dakota, South Dakota, Montana, and Wyoming go together. Out east you might have Maine, Vermont, and New Hampshire together. We're consulting with experts tomorrow about that.
As envisioned, the co-op proposal would create a bunch of member operated plans around the country, none of which would have the clout to compete with private insurance or really lower prices with providers and drug companies.
Also, another note of caution: A co-op is a legal structure. In a co-op, members of the co-op are legally liable for the co-op. That means that if a co-op was, say, sued for doing something wrong, its members might be liable for the legal bills and damages.
If Senator Conrad or anyone else in Congress can come up with a proposal that meets the above principles, we'd be happy to support it, whatever it's called. As the proposal stands now, Conrad's co-ops will not bring costs down, save our economy, or allow us to choose a viable public option if we don't want to be at the mercy of private insurance. These co-ops will not solve the health care crisis, and so we oppose them.
If you agree, you can click here to call your Senators and tell them why a co-op is not the change you voted for.
There are several characteristics of a true co-op such as the
grocery market Co-op that has been in Hanover/Lebanon , New Hampshire since 1934.
The first is that it is owned by the membership who buy shares and the officers are elected annually by direct ballot at the meeting.
The second is that it is strictly non-profit (hear that, o' ye
privatizers). All income after sales and overhead is distributed to the members or utilized for capital investment by the members'consent which must be by at a meeting of the quorum of the members. (no "proxies" for stockholders)
The officers and employees are expert in their subject: produce and their economy. Not like investors in hospitals who might not know a ribbon retractor from a thrombus.
If that is not enough for you insurance bureaucrats to reconsider the government option, a co-operative is the kind of group that always has been way ahead in such issues as environment and food additives and may bring in world class chemists who are not paid by the pharmaceutical industry and could well put them out of business, so beware!
I question coops - when they get big they forget why they formed and become expensive
Actually, cooperatives are corporations, and there is a shield of liability like in any corporation. Cooperative members elect a board of directors which has a fiduciary responsibility to oversee the cooperative. It is not true that the members would be responsible for legal bills and damages. Any lawsuit would be against the cooperative as a corporation, not against individual members.
It is wrong to say that the co-operative would not be large enough to impact the the health care system. One of the first things the health care cooperatives would do is to create a national cooperative of member cooperatives to have added clout to provide services for their members.
Totally agree with Bill B. that members would not be liable for actions against the co-op.
Ted Krajewski claims that the various cooperatives would create a national cooperative. From what I have seen living in southern states, the citizens of the south are extremely intent on preserving "States Rights" and would not go for forming a national cooperative. WE NEED A NATIONAL PUBLIC HEALTH CARE SYSTEM IN ORDER TO BE COMPETITIVE WITH PRIVATE INSURERS. Another reason we need the plan to be national is that we are a mobile society, often moving from one state to another. It would be costly and time consuming to have to quit one coop and go through the hassle of joining a new one in a different state or region.
To add another issue along this line that supports a national plan vs regional coops: my husband and his two business partners can't get anything but junk plans right now because they live in 3 states, separated enough that they would most likely be in 3 different regions. The good group plans are turning us down because they say we have to have at least two people in one state. A national public plan would give us a shot at qualifying for decent coverage.
The above arguments shed little light on why a coop would be better than a national government public option. Regional coops are a great idea for health care companies because a regional coop being smaller, they are more vulnerable to predatory pricing schemes by Healthnet and Blue Cross to drive them out of business. A national coop plan may happen but doubtful (there is a reason why the word regional is put before it, to keep it small) . Coops are great idea when the playing field is not far from level and the goods/services are not so complicated(case in point as noted above, grocery stores). But when people are dieing or suffering greatly due to denied coverage, going bankrupt etc, we need something much more drastic. We need a national public health care option.
this was my main concern on the "universal healthcare" . No one could figure out what was eight die us abs the quality of healthcare can't be decided upon.
Maybe we need legislation to better control private health insurance and employer self-insured programs. Legislation might limit the amount of profit a corporation/private plan might be allowed. Regarding employer self-funded programs, I have had some frustrating experiences. I live in a small town. While my previous employer offered a very good health plan, every two years it seemed, they changed administrators. This meant that there was a new round of developing "in network" doctors. This took about two years to include doctors in our town. Some doctors did not want to take the time to engage in another contract, so were not "in network". If an employee were seeing that doctor, the insurance payment was reduced. The only option was to change doctors, travel about 100 miles to a doctor who was "in-network" or in the HMO option, or pay.
One advantage of a coop would be that it would create an ongoing business model that could not be gutted by next crop of Republicans that are elected at a federal level.
Government run sounds good when the Gov is on the side of the citizens, but look what happens when Gov is taken over by the GOP? Look at OSHA, FDA, FEMA.
They undermined Medicare by privatizing parts of it, and creating the Prescription Drug plan that protects mostly big pharma. They even tried to gut Social Security.
In the long run, I would personally like select of strong CoOps, accompanied by strict rules forbidding descrimination on pricing or coverage by any company, private, for profit or coop.
Folks from Seattle may be in the best position to judge on the value of the co-op model for health care, as the Group Health Co-op is the largest and, I think, one of the oldest healthcare co-ops in the country, if not the world. Elsewhere, as the British started privatizing their health care system, some proposed shifting to a co-op model as an alternative to corporatization.
As an academic who's done research on co-ops, I can say there are some good advantages to the co-op idea for a health system, but also some serious drawbacks. On the good side:
– They are democratically-run organizations, where each member has an equal vote. Typically this means members elect a board of directors on a one-member, one-vote basis.
– They are non-profits, and member control means that they can be expected to be accountable to consumers rather than investors.
– Co-ops, as non-governmental organizations, may be both more palatable to Republicans as well as more resistant to shifts in political winds, as Bob T. suggests.
– Earlier writers are correct that they are limited liability corporations, so members can't be held liable in lawsuits. Rosenbaum is wrong on this issue.
Concerns:
– With co-ops, smaller is better, as the degree of accountability to members is higher. At 600,000 members, Seattle's Group Health is quite large, although it is regionally-based. At 2 million members nationally, REI (an outdoor-gear retailer) is the nation's largest co-op, but the degree to which members can hold leadership accountable is very limited. So a national co-op would be a co-op in name only, and even regional co-ops might stretch the term.
– According to a Group Health spokesperson, their rates are "similar" to those of private plans in the area (http://www.kaiserhealthnews.org/Checking-In-With/Group-Health-Cooperative.aspx). Like Kaiser, just because it's a non-profit doesn't make it cheaper.
– Co-ops are self-help organizations and, to function properly, need to be established by their members. Their is not a good track record with government-established co-ops (although the rural electrical co-ops that span 75% of the US land mass might be an exception). The British folk I spoke with about converting their health care system raised this concern, as it undermines the basic premisses that make co-ops work well.
I think you got to the heart of the issue. The co-op's rates aren't much lower than private plans, as such, they are not changing market dynamics. They would therefor make a pretty awful public option, as the whole point is to change the market and drive private plans to compete.
This whole issue is about profit, but it's not being talked about. Involving private insurers in a national public health plan is just one big contract or set of contracts–a big payday for somebody. The thing is that we already have a national public health plan. It's called Medicaid. It has some negative connotations, but simply give it a makeover and a name change and viola! you have a healthcare system. I really don't know why this hasn't been talked about more widely. This could compete and would have to be cheaper than private companies–no profit to pay for! Plus, doctors pay taxes, insurance companies and their executives do everything they can to get out of it. Some things need to be socialized–its that simple. This is going to fail because it's wishy-washy!
I agree with you on opening enrollment in medicare or medicaide. As it stands these programs serve the poor, old and disabled and do it fairly well. If they had a healthier, younger pool paying reasonable premiums things could only get better in terms of reimbursments and so forth.
This program is in place and ready to go.
Here is how the government health insurance program Medicare is handled: it is contracted out to the INSURANCE companies to administer - they must set up separate entities to only handle the medicare business and they are PAID to administer the program. Read the bill, the PUBLIC option is operated like medicare and subject to social security regulations with a trust fund set up to collect TAXES to pay for the program (section 207).
Why is there a sense of urgency to push through another piece of legislation that will cost american tax payers hundreds of billions.
There is no healthcare crisis! The crisis is the total lack of government accountability in spending our yet to be earned tax dollars. The crisis is government involvement bailing out select few companies when their own agencies created the mortgage crisis.. ie freddie mac / fannie mae. Their CEO's were unscathed in the media coverage.
If our thief of a treasurer timothy Geithner would have the infinite wisdom to stop tripling our existing currency by running printing presses non stop to fill government coffers and inflate our currency.. just wait for the prices to continue to tick upwards. Gas, food, water. You'll be mislead to throw stones at whatever the obama fed media document as the "crisis" of the day. Pull off the rose tinted glasses and lets hold these tyrants accountable by speaking out and expressing discontent.
The root of the problem is that our government is too big and they are spending too much of our money.
The Federal Government has become too large to be self supportive, trim the fat and cancel all government programs. If it can be proved that congress has saved a dollar.. then let them spend a dollar.
But, but, what about people who depend on my taxdollars for government subsidized housing and food stamps and .. and.. and.. and.. and… I say invite some of these families into your home and share your wealth of food and love. I will reciprocate.
Your wealth did not materialize out of thin air. What ever you do or have invested in, the profit percolated up over thousands and thousands of years of collective intelligence. You can not possibly prosper without it. It is to your advantage to pay your taxes and pay well and not nit pick about what person gets this or that because in the end it is crucial to your survival to have a well fed, healthy and housed population.
The sense of urgency is real and the cost is high, only because, 40 plus years ago, we should have made Energy Independence, a strategic Strategy for our nations Independence, like Truman tried make Health Care for all Americans real, these two issues are Haunting our people and our economy today.
Truman’s era and 40 years ago, it would’ve cost our nation children to pay it off, but the same powers aliened and killed it, so it will cost us 10 times as much as it would’ve back then.
The last 8 years, of deregulation and the last two years of the Right blocking the paper thin Democratic control, keeping all legislation from accountability and oversight, alas we crashed, outsourcing, downsizing, job losses, home foreclosures, shrinking middle class, all have contributed to where we are 6 months after Obama taking office.
The banks and financial Institutions are all healthy, but not contribution too or return, they are spending millions to keep EFCA and regulation and Health care for all Americans, along with Energy Independence and the proof is, they collectively killed Single payer, our last best hope to compete on the worlds stage and make no mistake about it, America has to compete on the Worlds stage.
60 plus % of Bankruptcies are because of medical Bills, cause Co-pays, Recession and the for-profit Health Care, forcing the poor, working poor into the States Mandated Emergency Room as primary doctors, largely keeping our States in deficit, that and more are a crisis.
Freddie and Fanny, were a very small part of the problem, unscrupulous business, practices, by Lenders, Credit Swaps, Mark to Market and securitization of Mortgages, Primes with Arm’s and no Oversight, no accountability, by the Conservative Republican controlled rubber stamp Congress is more to fault, but your right fanny and Freddie had a part, not big part, but a part.
Even I question the crooks who stood by and let this happen, are the one who are in charge of getting us out.
This is hard, when the private thief’s stop hiring and continue to fire, layoff, foreclose and stop lending, except to each others banks, the only last resort is the Government and if the Obama administration hadn’t started spending we would be far, far, far worst then we are today. Let’s look at the Right answer, cut taxes, mostly for upper classes, who we waited to start hiring for 8 years, we got low wage jobs, (less than 2 million and they loss all of those meager gains, in the last four months of the Bush administration) that don’t pay enough to keep an apartment, let along a family together.
“The root of the problem is that our government is too big and they are spending too much of our money.”
“The Federal Government has become too large to be self supportive, trim the fat and cancel all government programs. If it can be proved that congress has saved a dollar.. then let them spend a dollar.”
The above statements would’ve of been nice to hear this campaigned on during the Bush administration, but alas, it wasn’t heard from, buy those who voted for Bush, twice… I did hear it from the left, but they were shouted down and called un-American, but tax and spenders.
I appreciate the offer, someone will take you up on if they have a computer, if not don’t worry those who need your help, don’t know you offered.
It is truly a shame that congress can be brought and pay for by the drug company etc.. How soon we forget how and why America will never have universal health care. Did we not see a good example in the movie ( SICKO). No other reporter dare touch on this subject to get to the root of the matter which is money being made by all that pray on sick Americans. No you will never see a network or newspaper reporter expose whose getting money from lobbyist and how it influence their vote. Its not that health care for all is too expense. Its simply congress and their drug companies lobbyist will not ever let go of the golden goose that lays the eggs. I for one know why this country will never have universal health care; and if you follow the MONEY you too will know. Its not that complicated. Greed is the root of our never having universal health care would you not agreed. Agreed or not its TRUE
Medical clinics established back in the fifties and sixties worked very well and stood as entities in their own rights. They had a central billing for all doctors. Unbearable costs could be negotiated. Probably all doctors weren't rich then but that honestly didn't seem to be a part of the package. Two things happened next that spoiled the pie. Pharmaceutical companies with their block busting drugs designed for all to take from cradle to grave (do the math) and insurance companies that held out their little hands and asked to hold all the cash in play. They, of course, got to decide who could play in their game and how much to pay. That was the end of health care or even the hope for health care. TAke the profit out of it, take back all those high rise buildings in every town built with your money, take away the advertising ability for drugs and you will have gone a way toward a workable health care reform. Co-ops are good and manageable close in. They are not exclusive. Everyone can join, even when you move. They control costs. You get to vote and it counts. Let's consider a mutual health care program. ie: no profits
Historically, the first Universal National Health Care system was created by uniting a series of cooperative health care systems in Germany. They are independent of both industry and government and answer only to the people that they serve. The basic unit of the coops is the city/county. These basic units unite at the state and finally federal levels as needed for their own benefits.
Now that system is judged to be one of the best systems in the world according to the WHO. Additionally it gets the highest marks in satisfaction from its citizens on international polls. Most likely because the system is responsive to its citizens because it is run by elected officials at the local level.
This system now provides consistent care for its nation that is federally regulated so that all regions have a similar basic care at a basic cost. They allow people to move from one place to another easily. They band together to negotiate in block with Big Pharma and the government as needed.
Granted in order to get our system to come up to the German standard, you would need coops to spring up every where and then get the coops to unite their efforts into regional negotiation blocks. That would be hard to do but could end up a better system than the single payer system that is currently offered by Medicare.
After all the entire reason that we do not have a working health care system in this country in the first place is because the people in charge of Medicare, Congress, are not as responsive to the public as they are to the health care industry. It would be easy for them to sabotage the public option and make it so horrible that it was abandoned by the majority of people in America.
we have a co-op sort of insurance pool in wisconsin for people who cannot even buy insurance usually for having the temerity to have been sick at some prior point in their lives. the cost is 150% of the highest premiums available with bad deductibles.
the co-op plan will empower insurance companies to make higher profits. it is very worrisome.
One of the reasons our healthcare premiums are so high is because we have a constricted supply of providers (insurance carriers) in some regions of the country - this is due to state regulations. To increase competition, individuals should be able to purchase anywhere in the country. In NJ there is guaranteed issue, and community rating - which means you cannot be excluded due to pre-existing conditions, and premiums cannot be escalated due to health either (similar to the way group policies are issued). NJ has a fairly good mix of providers, but premiums are 2x the national average due to coverage for pre-existing and community rating.
I worked for an insurance co. who had a healthcare unit at one time, they competed hard for even small to mid-size group plans. They had contracted measured terms of service for handling of phone calls, uptime of website and other customer service systems,speed of paying claims and employee/enrollee satisfaction. Most insurers have coverge ratio of between 80-90%. Which means between 80-90 cents of every dollar go to claims payment directly. That's before administration costs. No you don't want to be insured by an insurer with a 99% coverage ratio - they need reserves for periods of high claims.
130 million plus americans are insured in the group market where people are pretty happy. 15 million people are in the indivdual market, where most of the problems are, and then we have the uninsured to help. We need to help individuals to be treated as "groups" by allowing them "collective bargaining power" through an exchange. Advanceable refundable tax credits for low-income so they can purchase individual policies through an exchange also. Give individuals the same tax break that those in group plans get. Make policies portable. Allow employers an option to contribute to HSA's of employees - along with pre-tax employee contributions. This would encourage employers who don't currently provide insurance to at least pay for a portion of the cost - if they can't afford to run a full plan themselves.
That's actually an awful idea.
The only reason insurance companies set up offices in all 50 states is because they have to, because people can't buy insurance over state lines. That means that in states that have good regulations, those residents are less screwed by the insurance industry.
If you allowed people to buy insurance over state lines, the insurance companies would only operate out of states with lax regulations, destroying what little consumer protections we currently have.
The model of combining non-profit, regional self-insurance pools for catastrophic policy and individual health savings accounts is the way to go.
This model is run by a pool of individuals and small and large business in the region. The coverage is set up by its board elected by the members. The pool can hire insurance companies for a fee to run its programs. Government should be out of the pool. The pool must not contract with doctors, hospitals or pharmacies to promote competition.
The individual's health savings account gives himl the financial incentive for his own decision-making power. The individual will be vigilant in preventive medicine for avoiding unnecessary health problems and care, thus reduce the health care spending. Health savings accounts should be offered to both Medicare and Medicaid beneficiaries.
Visit http://www.autonomouscare.info for the model, and http://www.carbohydratescankill.com for changing lifestyle for good health.
Since we are 36th in the world when it comes to Health Care according to the World Health Organization and at some point 92% of us will become disabled how can we NOT have healthcare coverage that comes from some other source than PRIVATE For-Profit Insurance?
It's just plain neglect that we don't already have it. I cannot believe that average citizens do not already grasp the seriousness of this problem.
If you do everything right in this country: Get an education, get a job, work hard, get insurance AND save your money - you still end up bankrupt when a family member gets sick! And the really maddening part about that is most people do not believe it will happen to them!!
When you get sick in this country - even if you have private pay insurance (provided by employers or by your own paycheck) you will lose it when you get sick or it will become so expensive you cannot afford it! Honestly! Can most American's afford policies extending into the thousands of dollars per month and still pay their deductables, co-pays, and "other out of pocket costs"?! I think not. Even if you can - God help you when your premiums go up along WITH the BASIC Costs (prices) of Healthcare and Drugs!
We MUST have a public option for those without healthcare (and even those who do have healthcare if they choose to opt out of it). If we don't - nothing will change but the cost of healthcare and the lack of access (it will get worse).
I DO know friends and family who live/work in Europe and they're plenty happy with their healthcare (and their taxes). Lets face it - if we can fund a war that kills millions, why can't we fund Healthcare?!!!
I've scanned throught the various responses & they all have some good points. My bottom line is: How can the USA be OK with having MILLIONS of Americans without health insurance? (And they're not all illegal immigrants) In my situation, my husband & I are both insured through our employers–even though it takes a large $$ amount out of each of our paychecks. Now, my son who is out of college, no longer is covered by our insurance. He could have the same medical coverage through COBRA at the cost of $500 p/month, which he can't afford. My husband & I can't afford an additional $500 to be taken from out paychecks either. My son found a job, but can't afford even the cheapest HMO health benefits that he has been offered. So, as of now, my 24 year old son is walking/driving around without health insurance. Heaven help us if he gets in a car accident & needs to be hospitalized. This is why we need a public health option—it's many of our "kids" in the US that can't affort the overpriced health care offered by private health companies. We need a program that will force these money-making insurance companies to lower their premiums & become more concerned about "health care" than their large profits. Will co-ops do this? It doesn't appear that they will, so I can't support reform with this as an option. Oh, by the way, the Republicans have already stated they won't support co-ops either.
Really silly - these so called coops (electric/food) are all the same once they get big and forget what and why they were formed. They eventually grow and provide a dis-service by being overly priced serving the well to do..
Whats the so called benefit of joining a coop. ba hum bug!