Baucus: We Might Replace The Public Health Insurance Option With A Co-op

On Tuesday, Sen. Kent Conrad (D-ND) floated the idea of replacing a public health insurance option with consumer-owned health cooperatives that would “be subject to the same standards [as private plans],” and now Senate Finance Committee Chairman Max Baucus has indicated that he is “inclined toward a co-op”:

“I am inclined, and I think the committee is inclined, toward a co-op,” Mr. Baucus said.“It’s not going to be public, we won’t call it public, but it will be tough enough to keep insurance companies’ feet to the fire,” Mr. Baucus said of the co-op.

Conrad’s proposal would establish regional or state-based entities that, upon enrolling enough individuals, would either self-insure or contract out to a third-party administrator. In this sense, a co-op would act like just another non-profit health insurance plan and would have no ability to improve health quality by championing payment innovations or other delivery system reforms.

After all, one of the advantages of a truly national public plan is its ability to improve care quality by spearheading reforms and innovations. A new public plan has the potential to do even more to drive improvements in the health care system and set the standard for developing new payment models and investing in preventive care and care coordination.


Baucus suggests that co-ops would “be tough enough to keep insurance companies’ feet to the fire,” but it’s unclear how 50 different health plans or even one national non-profit plan could influence the market. For some health care reformers, a trigger alternative — an arrangement under which a robust public plan enters the market if premiums do not decrease by X% over Y years — is preferable to just another non-profit insurance plan(s) that is unable to improve care quality.