Co-Ops are No Substitute for a Public Option

Ezra Klein’s interview with Senator Kent Conrad (D-ND) is probably the best source for information for Conrad’s thinking about health care co-ops as an alternative to for-profit private plans. I think the interview also makes clear that Conrad’s thinking about this is still a bit on the vague side. Part of the issue is that a lot of the thinking is clearly political thinking, thinking about how to come up with something that Republicans will vote for. As Ezra says and as Jonathan Cohn agrees, the merits of this proposal aside it’s just not a substitute for a robust public health insurance option.

To put it most crudely, the available evidence appears to overwhelmingly indicate that governments can provide health insurance of equal quality at lower cost to the private sector. It’s also true that a certain kind of ideological dogma says this can’t possibly be true. The view behind the public insurance option is that the dogma ought to be put to the test through competition. Proposals that aim to do something, nut that don’t aim to put the dogma to the test, are not a compromise. Indeed, the idea of a “public option” is itself a compromise between ideological dogma and the evidence in favor of single payer. The health co-ops seem like an interesting idea to me, but anything that drops the public plan is a proposal to drop the public plan not really a public plan “compromise.” That said, insofar as Congress is inclined to do this it ought to be done well.

Igor Volsky has some suggestions:

1. To exert maximum purchasing power and achieve bargaining clout to compete with provider oligarchies (that are currently setting prices) Congress would have to establish a single national cooperative.

2. Congress should allocate federal start-up funds to quickly establish the cooperative.

3. The cooperative should follow all of the rules of the Exchange. It would have to guarantee coverage at community rates and would not be able to discriminate against individuals with pre-existing conditions, or impose lifetime or annual limits on benefits for any participant or beneficiary. The cooperative must commit an appropriate percentage of premiums towards medical benefits.

4. It should be transparent and accountable to its members and the public.

5. The cooperative should be required to provide the same minimum benefits as private insurers.

6. The cooperative could be required to implement delivery system and payment reforms and “replicate the accountable care organizations like the Mayo Clinic and Seattle’s Group Health that provide a proven model for delivering high quality, affordable care in a non-profit, group practice setting.”


It strikes me as a little weird that this idea seems to be flying into place so suddenly out of left field, but it seems to be gaining a lot of momentum over the past few days.