Simple Test To Determine If Conrad's Co-ops Are Worthless

The Senate Finance Committee bill will likely include Senator Conrad's private co-ops idea instead of a public option. I plan to eventually write a piece explaining why Conrad's co-ops will likely prove unworkable. But there is a simple test to determine if Conrad's idea is completely worthless.

Obama has repeatedly explained that he wants a public plan to provide competition to drive down cost and keep insurance companies honest. Any student of economics would know that no business wants to face competition. Competition takes away market share and reduces profit margins.

The health insurance industry will (and frankly should) fight anything that would provide real competition. Competition will take away customers, drive down the premiums that they can charge, and reduce their profits. Competition would be good for average Americans but bad for the large health insurance corporations' bottom line.

Whether it be a public plan or private co-ops, the for-profit health insurance companies will fight anything that has a good chance of reducing their profit margins through real competition.

If the private health insurance companies do not fight Conrad's co-op proposal as vigorously as they are fighting against the public plan, you know they don't think it has a chance of driving down the premiums they are charging Americans. If the insurance companies do not fight Conrad's co-op proposal tooth and nail, you will know his idea worthless and useless. If the health insurance lobby endorses a bill that includes Conrad's co-ops proposal, that is proof it is a terrible idea.

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