Monday, July 20, 2009

Why Co-ops would hurt the Public Health Insurance Option.

A co-op for the public option?
Let's talk principles.

Posted on June 12th, 2009 by Jason Rosenbaum in Congress Watch

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.

1. 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.

2. 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.

3. 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.

4. 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.

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 go here:
to call your Senators and tell them why a co-op is not the change you voted for.

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