A Co-op By Any Other Name


Carl Graham


As the conversation about health care reform turns to co-ops, it might be useful to take a step back and readdress how we got here. The “Public Option” put forward by Congressional Democrats tacitly accepted that most Americans do not support a single-payer, government-run health care system. This point has also been consistently upheld by polling data, even as the same polling data affirm that most Americans believe our health care system is broken and in need of reform.

But now the public option is ailing, too. And we’re asked to embrace its fraternal twin: the co-op. The problem isn’t really the co-op idea – although the idea certainly has problems. The problem is that many of us see both the public option and co-ops as an end-around to what Americans have repeatedly and adamantly said is unacceptable: single-payer government-run health care.

Our health care system needs reform. We need to improve access to quality care for the uninsured and for those with preexisting conditions. And we need to get medical costs under control before they drive us into national bankruptcy. No serious person that I know of is arguing otherwise. But many of those involved in the debate have been less than candid in relating their desired ends to their proposed means, leaving those of us who favor free market solutions to look for wolves in sheep’s clothing in any proposal they put forward.

The co-op idea is innocuous enough. In fact, health insurance co-ops already exist throughout the country. And there is nothing currently stopping state or local governments from starting more of them tomorrow. Minneapolis has one with 660,000 members and the Group Health Cooperative in Seattle provides coverage for 10 percent of Washington State residents. So if they already exist how will adding one more co-op to the mix, not to mention the 1,300 or so private insurers already out there, increase competition? It clearly won’t. So why a national co-op, and why now?

With much of the Democratic leadership on record as favoring a single-payer system it just doesn’t pass the giggle test to assert that this isn’t yet another stone on the path towards a single-payer system. Senator Reid’s statement that “We’re going to have some type of public option, call it a ‘co-op’, call it what you want…” seems to indicate that co-ops are simply a rebranding of the public option that most Americans clearly don’t want. So let’s ask them to demonstrate that their real intent is to create a true co-op – even though they already exist – and not simply a “rose by any other name” public option.

It’s a simple test. If it walks like a duck and quacks like a duck, it’s probably a duck. A true co-op is owned and controlled by its members. They provide the investment, they pay the costs and receive the benefits, and they elect a board to oversee management, make rules, and provide governance. That waddles and quacks just fine.

Although it’s a moving target, the ‘co-op’ being considered by Congress wouldn’t look quite like this. Sen. Charles Schumer (D-NY) for example, makes it clear that the co-op’s officers and directors would be appointed by the president and Congress, and that Congress would set the rules under which it operates. Or it might be done by the Secretary of Health and Human Services. It would also receive a taxpayer-funded multi-billion dollar startup investment and subsidies for some undetermined time. Proponents say these would all be temporary, sort of like the post office, AMTRAK, Fannie-Mae and Freddie-Mac, and a whole bunch of other ‘temporary’ government-sponsored entities that are now doing just fine on their own. I’ll leave it for others to explain how this fits the definition of co-op and just point out that it looks pretty much identical to the public option that’s being jettisoned in the face of fierce grass roots opposition.

There are health system reform ideas out there that can pass with bipartisan majorities tomorrow if simply increasing access and decreasing costs are the real objectives. We can provide vouchers and tax credits that empower consumers to shop for the best policies rather than being tied to employer or government-based plans. We can reward healthy lifestyles, reform tort laws, reduce Medicare and Medicaid waste, and implement a host of other options that cost little and empower people rather than bureaucrats and politicians. Why not give those a try before turning a sixth of our economy and more of our freedoms over to the whims of special interests and their government enablers?



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The Montana Policy is an independent nonpartisan policy research center based in Bozeman. It provides analysis and information to encourage individual freedom, personal responsibility, and market oriented policy solutions in Montana.


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