Health Care Co-Ops

Yesterday, Kent Conrad floated the idea that instead of having a robust public option in health care “exchanges,” we could instead implement rules designed to spur the creation of non-profit “co-ops” that would provide an alternative to private companies without government control. Or, of course, government’s ability to piggyback on Medicare and achieve cost controls. I’ll recommend Igor Volsky’s analysis of the problems facing health co-ops that legislation would have to overcome.

I’ll say that I think this is a pretty good idea, but it stands on its own merits completely apart from the merits of a public plan. In other words, there’s no reason we shouldn’t have co-ops and private plans and a real public plan. Medicine has always been a mix of state, non-profit, and for-profit actors and I think it’s worth broadening the mix of insurance options available to ordinary people.

That said, as an alternative to a public plan this simply doesn’t meet what I see as the main objective of a public plan. But beyond this, I think the larger issue is that you sort of can’t “compromise” around the core political issues here. Insurance companies object to the idea of a public plan because they don’t want to lose business. Anything you dream up that would cause insurance companies to lose business, they’ll object to. After all, what else are they going to do? But anything you dream up that doesn’t cause insurance companies to lose any business isn’t going to accomplish anything meaningful. Insofar as what’s really going on in the halls of congress is that members are trying to balance progressive pressure for a public plan with industry opposition to it, you’re going to keep banging your head against the reality that you can’t split the difference between “incumbents face a new strong competitor” and “incumbents don’t face a new strong competitor.” And incumbents really don’t want to face a new strong competitor—incumbents hate competitors!