Conrad's state-based co-ops idea was once seen as the great “compromise” for health care reform and the public option issue. It is an idea which never really picked up broad support, and recently seems to be on the outs. The latest CBO report on the Baucus bill might just be the nail in the coffin for Conrad's co-ops:
The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments. As a result, CBO estimates that of the $6 billion in federal funds that would be made available, about $3 billion would be spent over the 2010–2019 period.
Now that is some harsh analysis. Conrad has a history of ignoring the CBO when they disagree with him about his co-ops idea, but this is still really brutal.
The CBO predicts that only $3 billion of the $6 billion, set aside as seed money for people/groups trying to set up health insurance co-ops would be spent. To translate, the CBO thinks the co-ops are such a bad idea that there aren't enough people out there willing to take free money from the government to try to set them up. I hope this CBO report finally takes the silly co-ops idea off the table once and for all.