This morning on CNN, Sen. Kent Conrad (D-ND), the author of the health care co-op proposal that is apparently gaining traction among many Democrats, argued it’s a “very successful business model.” But when host John Roberts repeatedly pressed Conrad on whether the creation of non-profit, member-driven health care cooperatives would drive down costs for consumers, Conrad acknowledged they would not:
ROBERTS: What would they do to reduce costs? Because that is one of the central issues of health care reform.
CONRAD: Well, the important thing is they’d provide more competition. … Beyond that, I think it’s very important not to over-promise here. […]
ROBERTS: So nothing really in driving down the costs of service then?
CONRAD: Uhhh, no. If you believe competition helps drive down costs, then they would certainly contribute to holding down costs.
Conrad stated that the purpose of co-ops is two-fold: 1) “providing additional competition,” and 2) “being an entity that is not government-run, government-controlled.” Watch it:
While Conrad emphasizes the “competition” that health care co-ops would provide to private insurers, health care experts argue they would be too weak to have a major impact. “It’s very difficult to start up a new insurance company and break into markets where insurers are very established,” said Paul Ginsburg, president of the Center for Studying Health System Change. “I don’t see how they’re going to obtain a large enough market share…to make a difference.” The New York Times adds that the history of health care co-ops has not fared well:
The co-op idea is so ill defined that no one knows exactly what it would look like or how effectively it would compete with commercial insurers. […]
In the 1990s, Iowa adopted a law to encourage the development of health care co-ops. One was created, and it died within two years. Although the law is still on the books, the state does not have a co-op now, said Susan E. Voss, the Iowa insurance commissioner.
Conrad acknowledges his co-op proposal would do little to tackle health care costs, the single biggest challenge of reform. Ironically, the public option –- which Conrad is trying to defeat –- has been estimated by the Congressional Budget Office to significantly reduce costs over time. And yet, according to Conrad, the public option is not on the table simply because “there have never been the votes in the United States” for it.
Ezra Klein writes, “It’s also worth saying that there’s a difference between bargaining away the public plan and giving up on the public plan. Conrad is giving up on the public plan, in public, in return for nothing. He’s not locked in endless deliberations and bargaining it away for solid Republican votes and higher subsidies.”