An Inkwell Institute paper
Subject: Health Co-ops
We have heard a lot of crap about the public option and since it is about as popular with the Repubs as a turd in a punch bowl, it is basically on life support. Meaning it is really close to being red lined from the bill. But wait there is more! I listen to Obama recently and it sounds to me like the public option is alive….well, the phrase is alive….I look for the final deal to have a health co-op in it and that the admin will use it as a public option…not exactly what is meant…but when the prez needs a victory you can change the meaning to fit the victory.
Now, does anyone really know what a health co-op is all about? That is a rhetorical question…I will tell you what it is….first what the insurance industry is saying:
There’s nothing wrong with co-ops, per se. Their appeal is that they’d be a sort of kinder and gentler version of private insurance.
But press some co-op enthusiasts for details, and there’s a lack of clarity about how they’d get started, how much the start-up would cost, how long it would take, how they’d grow big enough to compete with private insurers, how they’d significantly differ from the original state Blue Cross/Blue Shield organizations and, most importantly, how they could save serious money.
History is not encouraging. Hundreds of health co-ops were formed after the Depression to provide medical care in rural areas, and nearly all of them failed. Even the one considered most successful — Group Health Cooperative of Puget Sound in Washington state — took more than 60 years to reach the roughly 600,000 members it has today. (Conrad says a co-op needs at least 500,000 members to have market clout; private WellPoint insures more than 30 million.) Nor does Group Health have a stellar record of holding down costs; since 2000, its annual premium increases for individuals have averaged 12.3%, less than many private insurers but still about four times the rate of inflation.
As you can see, the insurance industry is not high on the co-op idea….go figure….and now the other side of the coin…this is from a document circulated by the Finance Committee:
* There are no free rides in co-ops. Every person would have to pay dues, whether they have the money on their own or they get a government subsidy (which would have to be worked out). Costs are not spread among paying and non-paying members.
* The feds could pay the start-up costs for a co-op, but could not pay to sustain it.
* Co-ops could be different sizes — local, regional, or national. NYC might have several, while parts of North and South Dakota could team up to offer one.
* Every state would be required to have at least one co-op option.
The one co-op that is most cited is the Puget Sound Co-op and it looks like this:
The cost for a mid-30s single, self-employed woman runs from $78 per month for a catastrophic plan to $277 per month for full coverage, with big swings in deductibles and cost sharing. A family of four, with no employer support, would pay $244 per month to $862 per month. How does that compare with your current coverage? I do not see this as the answer to helping all those uninsured people we have today…but then few listen to me…..
AS I have said on a couple of occasions, I watch and listen to the health debate very carefully. I try to debunk any BS and give analysis on the parts that I think the people need to know. I realize that it is a pretty dry subject for most people and they had prefer that their fav cable news give them their talking points…but it is NEVER that simple. I have said that I believe that the co-op will be part of the final plan and that Obama will claim victory on the public option, even though it is far from a victory on the public option.