A Fair Compromise for Conrad's Co-op Plan

Senator Conrad is still pushing his idea of eliminating the public plan and only creating a “co-op plan” instead. But he is willing to greatly change his original proposal to gain the support of Senator Schumer.

Ryan Grim at HuffingtonPost.com is reporting that Senator Conrad would now support a single national “co-op”. For the first few years it would also be overseen by a federal board appointed by the Health and Human Services Secretary. (If it is controlled by the public sector how is it not a public plan?)

Senator Conrad wants to force the co-op to eventually lose its federal oversight board, while Senator Schumer wants the board to be permanent. Forcing the co-op to change (or not change) its governing oversight is in direct opposition to the basic principle of a cooperative.

Instead of having a small group of senators forcing millions of future co-op members to change the way they run their organization, they should leave it up to the members. The whole point of a co-op is to allow members to vote on the direction of the cooperative.

It seems the only smart, fair, and appropriate compromise is to put the issue up for vote by the members. For example, The cooperative would lose its federal oversight board only if 50% plus 1 of all members mailed in a ballot demanding the change.

Co-op In Name Only

In an AP story, there is a very interesting small piece of news. The report indicates that Senator Baucus is pushing hard to abandon the public option and create a non-profit cooperative instead. What is new, though, is that “Grassley said nothing was finalized yet, and indicated the sticking point was Baucus' insistence that the federal government play a behind-the-scenes role.”

Just how much power the federal government would have “behind the scenes” could dramatically change the nature of the co-op. It is possible that Baucus' goal is to produce a co-op in name only or a true public plan with just a more palatable name.

There are several ways to create a co-op that is directly or indirectly controlled by the government. You could, for example, write the co-op's charter so that its procedures, coverage, and payments are directly tied to Medicare. You could also create a government “health insurance best practices” board that would give “recommendations,” and the co-op would just happen to follow them exactly.

A co-op in name only is unlikely to win the support of almost any Republican, but it might provide the political coverage that a few moderate Democratic senators and two to three Republicans might need, while still winning the support of more liberal businesses.

If Senator Baucus eventually gives into Senator Grassley's demands and makes the co-op completely useless as a replacement to the public option, I predict there will be outright war within the Democratic party. The public option is simply too important to the party's grassroots. It is the one issue that can really rally supporters to make calls and knock on doors. If there is no public option, instead of working hard to pass reform the grassroots may end up killing it.

Senator Conrad Is Trying To Kill The Public Plan

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.