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Cooperatives Emerge as Focal Point of Health Debate

With the Obama administration signaling a new openness to dropping a public insurance option from any health care overhaul, the focus now turns toward the efficacy of the cooperative insurance model.

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  • CECI CONNOLLY, The Washington Post:

    The public option has been fading a little bit for quite some time now. The dynamic is over in the Senate Finance Committee, as Judy and you talked about. There are not the votes in the Senate for what's called a robust government option.

    So they have been looking at this co-op idea for quite some time. But it's not entirely clear that they have the votes for that, either, so it's very much a work in progress.


    Help describe a little bit more than we have so far what co-ops are and what the distinction is between what they're proposing and what a publicly funded or publicly backed option would be.

    SUSAN DENTZER, editor, Health Affairs: Well, the main definition of a co-op at the moment seems to be that it's not a public plan and it's not private health insurance. It's a Goldilocks "something in between."

    As Senator Conrad says, they're sort of casting about to models in the landscape that might give us some sense of what these would look like. One is the Group Health model in Washington state and northern Idaho, which is, in health policy-ese, called an "integrated delivery system."

    It's where the insurance function is all wrapped up with the doctors, the hospital group, Health owns its own medical facilities, and you sign up. It's a consumer co-op. It's governed by a board of consumers, elected trustees who are consumers, who decide the policy.

    And in effect, what you do is you sign up and you become a part of this organization, not unlike the way many people sign up and become a member of, say, Kaiser Permanente or Geisinger, other integrated delivery systems around the country. So that's one potential model.


    But how do you make a model like that work? Or do we know whether a model like that can work on a national scale?


    Well, this is the big question, because a lot of these things have come about over time. Group Health has been around since 1947, so how you jump-start something that doesn't exist today becomes a really large question.

    The other model is really to strip away the health care piece and talk about an insurance co-op. And this gets more along the lines of — many of our viewers will know mutual insurance companies, which were owned by policyholders.

    It would be that same kind of model, where, in essence, the policy owners would own the policy. It wouldn't have to pay a separate higher rate of return to shareholders or investors and it might — and would be very strictly regulated and, therefore, potentially, cost a lot less than private insurance.