Health Care Cooperatives Gain Momentum in Senate

As the weeks pushed forward the health care debate is becoming less theoretical and policy details are beginning to emerge. Its clear that mandated health insurance will in all likelihood become the law of the land. Democrats support it, Republicans are supportive if still skeptical of "reform", the big players in the health care industry are counting on 10's of millions of new customers to offset the increased expenses of accepting customers with pre-existing conditions. Its the public health option and how to pay for it that are still contentious. You have a more "moderate" faction led by Senator Mac Baucus who is pushing a health care bill that industry could handle and would probably pick up significant GOP support, then on the other there is the President and Senator Kennedy backed by liberal interest groups pushing for public insurance plan. By the way have no illusions, that plans objective is to destroy private insurers and replace it with a single payer system. As these battles rage, it appears a compromise may be in the works:

June 11 (Bloomberg) -- Most Senate Finance Committee members are “inclined” to support creation of member-run health cooperatives to bridge a partisan divide over revamping the nation’s health-care system, the panel’s chairman said.

Chairman Max Baucus said lawmakers in both parties may embrace cooperatives as an alternative to a government-run health plan, supported by Democrats, to compete with private insurers. Most Republicans say a public plan threatens to undermine insurance companies.

“I am inclined, and I think the committee is inclined, toward it,” Baucus told reporters today after a closed-door meeting of his panel to discuss the idea. He said lawmakers don’t want a broad effort to overhaul the U.S. health-care system to “crash” under partisan disputes as it did in 1994 under President Bill Clinton.

Baucus and many lawmakers leaving the meeting said many details must be worked out and it isn’t clear the obstacles will be overcome. In addition, House Speaker Nancy Pelosi said today her chamber is still committed to creating a government-run program.

What are Cooperatives?

The idea of creating health-care cooperatives was proposed by Senator Kent Conrad, a North Dakota Democrat. It would allow non-profits to negotiate directly with health-care providers for low-cost rates. The plans they offer would be sold, like private plans, through Internet-based exchanges where consumers could buy insurance at lower-cost, group rates. Conrad said the cooperatives could be chartered by either the federal government or the states, and that they could receive federal seed money.

‘Private Sector Option’

Senator Charles Grassley of Iowa, the top Republican on the finance committee, hasn’t committed to the idea, though in a recorded interview today with reporters from his home state he called it a “private-sector option” that could boost competition. He said keeping government involvement minimal is key to attracting Republican support.

Here is an example of a co-operative from Wisconsin:

The Healthcare Coalition Cooperative (HCC) (www.hccwi.com) is a Wisconsin corporation established in 1991. The vision of the HCC is to foster an environment in which Member Employers can share in the development and access of high quality and cost effective employee benefit programs and services.

The HCC membership represents 12 employers in the Manitowoc County area, with approximately 5,000 employee lives, and growing. Member Employers receive access to programs and services at discounted prices that are not typically available outside the HCC in the Manitowoc area. Current programs include access to a patient advocacy program like no other in the community, ASO dental services with a dental network offering up to a 12% discount on claims, and preferred access to WisconsinRx, a premier pharmacy benefits manager.

I can't validate how good these programs are and the ones given are example for the readers own research.

Here is one from Seattle:

Founded in 1947, Group Health Cooperative is a consumer-governed, nonprofit health care system that coordinates care and coverage. Based in Seattle, Wash., Group Health and its subsidiary health carriers, Group Health Options, Inc. and KPS Health Plans, serve more than half a million residents of Washington state and Idaho.

From the Kaiser Foundation:

A plan to pool the ownership of health insurance into cooperatives owned by groups of residents and small businesses is attracting renewed hopes that a bipartisan public plan bill will pass Congress with wide support, The Associated Press reports.

"They'd be nonprofit, and without the government involvement that troubles Republicans and business groups about the public plan options. The chairman of the Senate Finance Committee, Sen. Max Baucus of Montana, said Wednesday the idea could be key to a bipartisan health bill. Baucus raised it in a meeting with President Barack Obama, saying later that Obama showed interest. Baucus' Republican counterpart, Sen. Chuck Grassley of Iowa, also said the concept had potential."

Conrad's attempt at crafting a bipartisan proposal attempts to placate Democrats who insist that insurance companies forced to make a profit can't be trusted to provide adequate care for Americans, though it's unclear if it will work for more liberal members of the party. "Profit-making insurance companies wouldn't run the show, but there also wouldn't be the federal government backing that Republicans fear would eliminate fair competition with private companies. The co-ops could get federal seed money, Conrad said, but that would be the end of federal involvement. The co-ops would negotiate directly with medical providers" (Werner, 6/10).

Dow Jones Newswires: "The Conrad proposal is getting attention largely because Republicans have not rejected it out of hand. Sen. Charles Grassley, R-Iowa, the top Republican on the Finance panel, appeared open to the plan, but cautious. 'If it can be presented... as an entirely private-sector operation and is like co-ops we know generally in the Midwest, I think it's got some possibilities,' Grassley said, comparing it to rural electric co-operatives that operate in some parts of the U.S. Under Conrad's proposal, co-operatives on a state and possibly a national level could gain a federal charter, collect premiums and provide health-care benefits for its members." (Yoest, 6/10).

Reuters: "Some Democrats, though, are cool to the idea. 'A public plan option that competes with private insurance and follows the same rules as private insurance is the only real way to give every American access to good, affordable health insurance,' said Sen. Jay Rockefeller, a (West Virginia) Democrat who has offered his own version of a public insurance plan." But Grassley said "that any federal money used to set up what likely would be state and regional health cooperatives would have to be in the form of loans and that the government should have no role in their operation" (Smith, 6/10).

Obama's calculation is simple, go along with the co-operatives and give up the cherished public insurance in exchange for passage of a bill that would likley have bi-partisan support but upset the left.