Health Care Co-Op Supporters Don't Know What They're Talking About

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First Posted: 08-18-09 03:23 PM   |   Updated: 08-18-09 03:54 PM

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Conrad Health Care

So! Have you heard about these HEALTH CARE CO-OPS? If you watched any news at all yesterday, the answer is yes! And as you heard people on the teevee, attempting to explain what a "health care co-op" is, you might have been left with the strong impression that no one really knew what the hell they were talking about. There's a reason for that: no one really knew what the hell they were talking about!

But what does it matter? Because "health care co-ops" have come to be defined politically as representing the "sensible center" of this debate, offering that elusive, intoxicating elixir known as "bipartisanship." In Washington anything that's "bipartisan" is considered to be stuffed full of wondrous Tinkerbell magic and beloved by the political press, regardless of whether it's effective policy or not. And it usually isn't! To political elites, "bipartisanship" is like cleavage, multiplied by Ecstacy.

In the case of co-ops, the discussion has been even more inane than usual because nobody seems able to consistently describe what a "health care co-op" is. This does not dissuade the media, however. They're perfectly happy allowing a bunch of idiots talk about how magical (or how destructive) co-ops are based purely on the totally screwed-up political calculus.

Here, for instance, is that most serious of bipartisan players, Iowa Republican Sen. Charles Grassley, on MSNBC's Morning Meeting!

GRASSLEY: well, first of all, I hope that you understand that there's a lot of co-ops around the country. Just a few of them involved in health care. So there's a lot of experience of 150 years with Americans with co-ops.

Okay, sure! There are a ton of great co-ops! 150 years of co-ops! But we're talking about nationwide health care reform, so I'm a bit nervous to hear that there are only a "few" co-ops "involved in health care." From whence does his faith in co-ops stem? As it turns out, it comes from a lot of examples that don't have anything to do with health care, even remotely! As pretty CNN hologram Jessica Yellin explained to birther fanatic Lou Dobbs, health care co-ops proponent Senator Kent Conrad was specifically inspired by an entirely different kind of co-op:

He believes that the co-ops are a better option because his constituents are familiar with these models because of energy co-ops they have in their communities and he's seen them work. So maybe that's a better way to go.

So, Kent Conrad is under the impression that electricity and health care are distributed in the same manner? That's sort of dubious! Luckily, energy co-ops aren't Conrad's only inspiration! On CNN, Ed Henry explained:

Kent Conrad has been the one pushing it, saying, look, this has worked with rural electrification, it's worked with credit unions and the like and then maybe this could work with health care.

See, it would be useful if someone in the news could maybe point out that rural electrification and credit unions and health care provision are actually entirely different things. Instead, we are presented with this argument: "Apple, ergo orange."

What's really important about the health care co-ops proposal, of course, is that it is NOT the "public option." But what if you're more concerned with utterly demagoguing the issue? Well, you get Ralph Reed, telling Sean Hannity that co-ops are actually rampantly horrible big-government public optionism, in Trojan Horse form:

Sean, the co-op they're talking about will be heavily subsidized by the federal government and initial subsidy of $3 million and that's just the tip of the iceberg because they're always wrong on their projections. Remember the public option, the government run plan masquerading as a co-op will be subsidized with our tax dollars and that will lead to substandard care across the board and be a major problem.
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So: the "health care co-op" is actually the "public option?" I feel like we are going in circles here!

Finally, Sanjay Gupta appeared on Anderson Cooper: 360, to at last offer a full explanation of what a co-op is. Remember: Gupta might have been Obama's Surgeon General if it hadn't been for the cripplingly low salary!

First of all, a co-op is not government run. You are talking about a not-for-profit organization that could offer insurance through a health exchange. They could go to the exchange, choose a private insurance company or they could choose insurance coming from a co-op. This is everyone who buys into the program, pays premiums, is essentially on the board as well. They are all sort of members as well as insured people. They figure out what the premiums are going to be, exactly what benefits are going to be offered. They are members as well as people who benefit from the plan.

[...]

If you look at the co-op across the board they have a couple of things going for them. They are not for profit, for example. They have low administration fees, overhead fees. As a result they may be able to have lower premiums -- that would be competitive...I can tell you this, looking at a lot of these historical knowledge of co-ops, unless you get scale -- hundreds of thousands of people participating -- it is hard for a co-op to compete against a private insurance company, which is why the people who are such supporters of the public option are crying foul. They are saying, look, the public option was a national option, it had scale. Hundreds of thousands if not more people. That could compete. Could a co-op even at a regional level compete? It all depends who joins.

So here's what the media knows about co-ops. If they exist, they are effective, unless they are ineffective. They are not socialized, government-run health care, unless they are. They provide an alternative to the public option...unless they don't. Proponents like them because if you ignore the many ways health-care co-ops are entirely unlike "credit unions" and "rural electrification," you can make the case that they are totally like "credit unions" and "rural electrification." And even if the White House follows along with the inane political calculus of "bipartisanship," and substitutes co-ops for the "public option" for the sake of earning Republican votes, chances are no Republicans will vote for it.

Great job, media!

[Would you like to follow me on Twitter? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here.]

So! Have you heard about these HEALTH CARE CO-OPS? If you watched any news at all yesterday, the answer is yes! And as you heard people on the teevee, attempting to explain what a "health care co-o...
So! Have you heard about these HEALTH CARE CO-OPS? If you watched any news at all yesterday, the answer is yes! And as you heard people on the teevee, attempting to explain what a "health care co-o...
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Linkins, your bifurcation of cooperative examples are myopic at best and misleading at worst. Lost in the Federal matrix of little known "agencies" quietly reposes a little known entity called CoBank a counterpart of the Federal Reserve bureaucratic joke which on an obviously much smaller scale performs for regionally chartered cooperative banks, including negotiation and processing large scale project financing on a national scale, virtually all of the services so ineptly performed by the Federal Reserve for commercial and "investment" banks. For creditability and regulatory purposes it reflects and carries the sanction of Federal Government, and logically and objectively spreads the risk (and return) among regional cooperative banks. Such a model could, it seems, be easily fitted to the health care services After all, financing of health care delivery, is a user service, not totally unlike power and communications upon which your limited research seems to focus and is a tested model. Don't expect the likes of Grassley or Kyl to understand such financial sophistication, however.

    Favorite    Flag as abusive Posted 08:51 AM on 08/19/2009
- scrzbill I'm a Fan of scrzbill 70 fans permalink
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You can lead a republican to Congress, but you cannot get them to vote. Any bill. Anytime. Anything by a liberal democrat with the obstructionist no party in power will not be considered by the birthers party.

Birthers, be honest, do you like paying insurance companies higher and higher rates each year with higher deductibles? If you are a single payer, do you like not being able to pay the same price as someone who works in a larger setting? Do you like being told, no you cannot get insurance with us because you have a pre existing condition? Do you like being told that you have to pay for you own handicap supplies? Wheelchairs, walkers, canes, care that temporarily removes the pain but not permanently. If you say yes to any of these questions, then you have the right person in congress for you. The party of no.

    Favorite    Flag as abusive Posted 08:19 AM on 08/19/2009

Correct me if I'm wrong, but wouldn't a budget neutral public option be the same thing as an aggregated national co-op? It would be owned and funded by those it insures and would not be a profit driven entity.

The whole co-op "compromise" is just a thinly veiled attempt at reducing the negotiating power of those who choose to use it. Regional co-operatives would obviously have fewer members than the national public option and thus less leverage during negotiations with providers. It's the oldest strategy in the book, divide and conquer.

    Favorite    Flag as abusive Posted 06:18 AM on 08/19/2009

According to today's editorial in the New York Times, the public option would result in about $75 billion in cost reduction while co-ops would be able to negotiate at best $10 - $20 billion in savings. So the next time you hear the term "co-op" think $45 - $55 billion handout to health care providers.

    Favorite    Flag as abusive Posted 06:34 AM on 08/19/2009
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What would Conrads cut be out of that?

    Favorite    Flag as abusive Posted 08:59 AM on 08/19/2009
- BettyTC I'm a Fan of BettyTC 15 fans permalink

Jason, so you figured out that co-ops are a midwestern kind of getting-along kind of thing or a high end real estate scam keeping the riff-raff out coalition. Wow. You're smart.

Keep your eye on the prize. It's not folks who instinctively know that a coop means exclusivity. This is about the40 to 50 million people who are not able to access the comfort of health insurance for themselves or their spouses or children. Folks want to be part of a free enterprise but are unable to partake of the American Dream because they are denied this comfort by insurance companies and their government. The middle class is trapped.

The legislation the conservatives and the moderate Dems (the Dogs) want would subsidize the insurance companies and reward them for a century of bad behavior.

Why subject us to more corporate bad behavior? The middle class has been decimated by conservative legislation for the last thirty years. Health Care reform is the first step in leveling the playing field. They would all finally figure out in the light of good health for themselves and their family that the Repulbicans are full of crap. It won't take a lot. Just a few minutes a day to read a decent newspaper. A blog. Talk to the neighbors. All because they have the time in their day, in good health, to partake of the American experience.

This is what the Republicans fear most. A healthy, intelligent electorate.

    Favorite    Flag as abusive Posted 01:53 AM on 08/19/2009
- bbnz I'm a Fan of bbnz permalink

In order for a co-op to effectively fight against the Big insurance companies would require hundreds of thousands to sign up. More importantly, they aren't cheap! Co-op's charge premiums that cost approx the same as plans available through the insurance providers. Lastly, they don't cover pre-existing conditions. Co-op's are NOT a viable option and the Insurance companies know it. The ONLY option is a Public Plan through the Govt.

    Favorite    Flag as abusive Posted 01:05 AM on 08/19/2009
- DaCoach I'm a Fan of DaCoach 6 fans permalink

To me it seems as if the coops mentioned are essentially the same as a mutual insurance company. Most of the well known mutuals cover workers compensation or life insurance. They operate identically as private insurance companies. However, at year end, excess profits are returned to policyholders. In the case of health insurance, I would imagine the returns would go to reduce future rates.

However, those mutual companies usually have about the same expense ratios as other insurers. I'd guess that the use of them might reduce premiums by about 5%.

    Favorite    Flag as abusive Posted 12:42 AM on 08/19/2009
- cigi I'm a Fan of cigi 36 fans permalink

I heard a caller on the Ed Schultz radio show call in this afternoon.­..he belongs to an insurance coop in Wisconsin and he says it is costing him and his wife $12K per year and they have high deductible­s...they merely become extensions of the insurance industry that is raping us currently. No to Coops, Public Option - YES!

    Favorite    Flag as abusive Posted 12:54 AM on 08/19/2009
- DaCoach I'm a Fan of DaCoach 6 fans permalink

That number is probably about correct. I'm with you. The public option is the only way to truly put a lid on prices. Typically insurers only return 53% of premiums in claims. Add to that the persistent inability of health carriers to rein in cost procedures. At a minimum i would expect a 25% reduction in premiums and a reduction in the growth of premiums to the CPI factor.

    Favorite    Flag as abusive Posted 01:14 AM on 08/19/2009

Co-ops is just a cop out. It is a solution nonsolution to protect the interest of private health insurance companies.

    Favorite    Flag as abusive Posted 11:58 PM on 08/18/2009

I heard something tonight on Rachel Maddow, that if true, should be considered as one of the greatest breaches of trust I have felt from a Democratic administration in my lifetime. What I think I heard was that Conrad and Rahm Emmanuel have determined to drop the 'public option' so as to keep the Republican coffers empty for the 2010 elections. It concerns me because I have always looked at Emmanuel as the leader of congressional elections activities for the party.

Again, if true, this will be the highest of betrayal in the trust I have given to this administration. If what I heard is true, we need to demand a clarification of intent. We did not elect this President to be just another politician who surrounds himself with hacks whose primary goal is re-election. I thought that we learned something from the perpetual campaigning of the last administration. There has seemed to be a somewhat sophomoric pride in the junkyard dog aspect of Emmanuel's personality I hope that this type of tactic is not exemplary of it.

Someone tell me I am wrong.

    Favorite    Flag as abusive Posted 11:38 PM on 08/18/2009
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Gupta sez no thank you Mr. Prez I need to make some money.

    Favorite    Flag as abusive Posted 11:09 PM on 08/18/2009
- essbird I'm a Fan of essbird 21 fans permalink
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Someone help me out here: A health insurance co-op is a government­-sanctione­d independent body, right? Hello? DOES ANYBODY REMEMBER BLUE CROSS/BLUE SHIELD?! Isn't co-op insurance what most everyone had through the fifties to eighties, until deregulation (Reagan) opened up competition and the costs soared? And wasn't the last straw when all the BC/BS companies, one in each state, were privatized and sold to companies like Anthem? Anybody who thinks that was a good idea, do you want a co-op now?

Single payer. Right now. Git 'r done.

    Favorite    Flag as abusive Posted 11:08 PM on 08/18/2009
- Peabodies I'm a Fan of Peabodies 22 fans permalink

Single payer (Medicare for all those who want it, any age) or a PRIVATE OPTION for those who prefer that. Works for me.

    Favorite    Flag as abusive Posted 11:59 PM on 08/18/2009

turn on anderson cooper he is talking about reconciliation

    Favorite    Flag as abusive Posted 11:01 PM on 08/18/2009

I saw on Anderson Cooper that the White House is leaning toward Reconciliation in Sept :-)

Of course they could have done that in April and the Republicans will scream but they scream anyway soooooooooo nothing new there.

    Favorite    Flag as abusive Posted 10:51 PM on 08/18/2009
- Msclvr31 I'm a Fan of Msclvr31 4 fans permalink

At least we can agree on this co-op proposal. It will not cut costs. Ditch this along with the public option and lets find a way to get the maximum amount of individuals covered in our current system without a radical overhaul..­...

    Favorite    Flag as abusive Posted 10:49 PM on 08/18/2009

Public option is not radical it's like medicare for more people

    Favorite    Flag as abusive Posted 10:53 PM on 08/18/2009
- oldngrumpy I'm a Fan of oldngrumpy 257 fans permalink
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That would be single payer. Glad you are so agreeable. It would be a snap to expand Medicare and the network is already in place with all the providers. Instant 27% savings and Medicare is salvaged with the expanded demographics so we won't have that massive cash injection to do again.

    Favorite    Flag as abusive Posted 10:54 PM on 08/18/2009

well I think it's one of the choices in public option as I understand it . an exchange of private companies and public option would be for people who cannot get insurance for whatever reason OR their current insurance is a certain percentage of their salary and it is too much money

At least that is how it was explained to me but the definition is not in stone obviously

    Favorite    Flag as abusive Posted 10:57 PM on 08/18/2009

Ok so for 6 month they talk they talk some more the the very best Conrad comes up with is coops cause he's seen some electricity coops

This man is going to make my hair fall out ..

    Favorite    Flag as abusive Posted 10:49 PM on 08/18/2009
- StillAmused I'm a Fan of StillAmused 266 fans permalink

Co-ops are the equivalent of an unneeded bailout for cash-engorged private insurance corporations.

No matter who operates the chute, guess who's waiting at the end with its mouth wide open?

    Favorite    Flag as abusive Posted 10:47 PM on 08/18/2009
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