Democratic Senator Kent Conrad has created an “alternative” which will kill the public health insurance option. Instead of a public option, the government would give loans to help create many small, independent health insurance “co-ops”. This is not a compromise between Progressives and the GOP minority. This would be a complete sell out on principle.
The “co-ops” would be nothing more than small, regional non-profit private health insurance companies. (There already are “non-profit” insurance companies, and they pay their top management millions a year.) The “co-ops” would lack the accountability and the cost saving benefits of a public option.
The “co-ops” would be too small to benefit from economies of scale. The different “co-ops” would create hundreds of redundant positions, offices, and systems. They would lack the negotiation power of size to lower prices. Since they would not be the large, default public plan, they would be forced to waste millions on advertising. There would also be no guarantee that the “co-ops” would adopt the best practice recommendations from the government. Unlike a national public option, the co-ops would do almost nothing to lower cost for millions of Americans struggling with the high cost of health care premiums.
The “co-ops” plan would do almost nothing to help promote real health care reform. It is not 50% between the Progressive and Republican position on the of the issue of the public plan. It is not even 5% of the Progressive position. It would be a complete and total victory for the Republicans. The “co-op” plan is nothing more than fancy language to kill the public option.
Update: the Minneapolis Star Tribune and the New York Times are falsely reporting that, "Senator Kent Conrad, Democrat of North Dakota, suggested that the public plan might take the form of an insurance cooperative, owned and operated for the benefit of its members." This is completely factually inaccurate. If the cooperatives are owned privately they are by definition not a "public" plan. The "co-ops" would not be in any way, shape, or form a public plan.