Co-op, Co-opt, Cop-Out: Conjugating Health Reform

A verb is conjugated according to its context. Healthcare proposals change according to their context, too. Health insurance co-ops have worked very well in certain parts of the country. But when they're used to kill meaningful nationwide reform, "co-ops" become a "co-opting" of the political process by special interests.

I've already expressed my objections to co-ops in this context. Bob Laszewski calls them "the single dumbest idea (he's) heard in the health care debate in twenty years." I think that's harsh - after all, I've heard lots of dumb ideas over the years - but Bob raises some objections I hadn't considered.

Sen. Kent Conrad boasts on his website that his co-op idea is a "a bipartisan, compromise health care reform proposal." But he apparently forgot to get any "bi" support. Sen. Jon Kyl rejected the idea by calling it a "Trojan Horse."

That makes co-ops a "monopartisan" proposal.

Conrad insists there aren't enough votes in the Senate for a public option. He has rejected Obama's deadline for health bill, and has sent mixed signals on whether he'd even vote for a bill that included a public option. He was evasive and perhaps even a little misleading in this exchange with Robert Siegel on National Public Radio:

SIEGEL: How much would it cost to get a network of nonprofit co-ops up and running all around the country?

Sen. CONRAD: We've gone to the best actuaries in the country and they've independently come back with the same answer. They have said about $6 billion to have the insurance reserve requirements met.

Sen. Conrad wasn't asked about "reserve requirements." He was asked how much it would cost. The total cost for creating a national co-op network would include offices, staff, computer systems, overhead, advertising, etc. etc. ... ... plus those billions in reserves. (We can't vet the $6 billion figure without knowing the underlying assumptions the actuaries were given.)

The Medicare organization at CMS already has much of the needed infrastructure in place, so it could do the job at much less cost - that is, if politicians don't bargain away too many of these cost-efficiencies. (Here's a little political shorthand: When it comes to the public option, "level playing field" is a euphemism for "spending a lot of money to provide political cover.")

Sen. Conrad also said this in the NPR interview: "There are large cooperatives all across this country. Land O'Lakes is a $12 billion club functioning all across America. There are rural electric co-ops in 47 states. Ace Hardware is a cooperative."

But healthcare is not a "commodity" like a kilowatt of power or a stick of margarine. Insurance is an amalgamation of predictions backed by financial instruments, and medical delivery is an economy in which the seller (who is frequently the physician) often controls the demand. Ace Hardware and Land O'Lakes may be fine companies, but they aren't working models for a competitive and efficient healthcare system.

Here's the political bottom line: Right now the "centrist" Democrats support a requirement that middle-class Americans obtain health insurance - the so-called "mandate." If they don't also provide a meaningful alternative to costly, for-profit insurance, the backlash against them will be enormous. Co-ops will not be able to provide that alternative.

And those who think Obama hasn't compromised enough on the public option should take note: He's already compromised plenty. He promised during the campaign that "any American (would) have the opportunity to enroll in the new public plan or an approved private plan." Yet only about six million employees will have that opportunity under most proposals being discussed, according to the Congressional Budget Office. (You can read the pdf report here or see Timothy Noah's summarization in this piece for Slate.) Six million employees is far more modest than a plan that's available to "any American," so there's already been plenty of compromise.

The co-op idea is probably dead, so the public option remains the last best hope for meaningful reform. So far the President has remained above the fray, preferring to let others fight it out. He won't have that luxury for much longer. The confrontation between progressive House Democrats and Senate Dems over the public plan option will come to a head soon. It will take a firm Presidential hand to resolve the conflict.

It's going to take leadership to turn co-option into co-operation.
_____________________

UPDATE: Speaking of Timothy Noah, today he points out that Obama is increasing funding for that "socialized medicine" over at the Veterans' Administration. I share his outrage, but I have a suggestion: Democrats should add provisions that remove the VA's "unfair advantages" over private insurance. That way they can ensure that our veterans receive care that is both more costly and less efficient than other Americans get.

Gotta level that playing field!

RJ Eskow blogs when he can at:

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Comments

[ChelseaC]

Every option besides expanding MEDICARE to ALL Americans who want it(our "public option" or passing HR-676 is a cop out.
The least that should be done of offer Medicare(after being cleaned up) to every American who wants in and leave those who want the for profit insurance to deal with them on their own with NO GOVERNMENT SUBSIDIES.
The tax payers should pay for health CARE not a for profit health "insurance."
3200 is a lousy bill--it's a boondoggle for the insurance cabal and big pharma.

http://www.pnhp.org/

[Quitcherbichin]

Forcing insurance companies to take people with preexisting conditions is going to drive up the cost for everyone. Why even call it "insurance" Insurance is something that you buy to protect you against something that may happen in the future. That would be like someone having a car wreck with no insurance and then calling the insurance company wanting insurance to cover them for the wreck they just had...ludicrous.

I would like to see these people covered in some fashion, but forcing them into private insurance plans is not the way to do it. In my state we have publicly (state) funded hospitals and clinics. People who cannot afford health insurance have access to these hospitals, and clinics at no charge. No one is turned away because of their inability to pay. Maybe the rest of the states need to look at something like that.

[WritusMaximus]

Sorry, but that' not the answer. What you get is underfunded, financially stressed publicly funded hospitals and clinics, which cannot cope with the added workload and higher expenses, hence have to cut corners. By the way, if a person acquires a devastating, expensive-to-treat illness and gets kicked out of private health insurance plan (yeah, you can use euphemisms but bottom line you get kicked out) then said person now has a preexisting condition and by your very same argument, needs to run to the overloaded, publicly-financed hospitals and clinics for whatever treatment is available/­affordable­, because he/she is now uninsurable in the for-profit insurance market.

But I see your point. It's a business, and in business you have to cut your losses. Pun not intended, heck, it aint even funny.

[WritusMaximus]

Insurance for the healthy, what a concept! Patients with expensive-to-treat illnesses need to visit their publicly funded hospitals and clinics.

[fwilms]

I don't know what a health co-op is or how it works and this article doesn't explain it, so the article is meaningless to me. Please include a couple sentences telling us what it is you're talking about when you write. Thanks.

[MeetJohnDoe]

Enough already.

Time for the US to enter the civilized world.

Education for all, health care for all. And those who don't want it -- don't have to have it.

(I am waiting for all those Cons scared of government programs to burn their social security cards, and send back their SS check, and refuse to go on Medicare. It's the least they can do.)

[DaveCarroll4]

Negotiations and concessions have produced zero Republican commitments to join reform. Now we have the Conservadems in the Senate trying to kill the will of those who gave Democrats overwhelming Majorities. Do you know who these Senators are? Here they are: Baucus, Bay, Begich, Bennet, Byrd, Carper, Casey, Conrad, Hagan, *Kohl, *Levin, *Lieberman, Lincoln, McCaskill, *Nelson (Bill), Pryor, Shaheen, *Specter, Udall. The asterisk indicates those who've made their Email forms a little more difficult (I suppose to discourage you from bothering them)? Go to Web Address: http://www.senate.gov/general/contact_information/senators_cfm.cfm This list is in alphabetical order, and there is an Email link to click on, for each. It took me 10 to 15 minutes to send this message: "You need to follow the will of the Voters who elected an Overwhelming Democratic Majority. We need health care reform, and without a "Public Option", there is no meaningful Reform. We can VOTE YOU OUT, too! We will not retreat!" You can even copy and paste this for expediency. I don't know how anyone could make it easier for you to have your voice heard!

[LauraKaye]

Thank you for the handy info. May I suggest also commenting on the news in these senators home states? It is more time consuming, but nothing says 'reelection?' louder than public opinion as shown in local news. So, to follow your example, those states are... Montana, Indiana, Colorado, West Virginia, Delaware, *Pennsylvania, North Dakota, North Carolina, *Wisconsin, *Michigan, *Connecticut, Arkansas, Missouri, *Florida, New Hampshire, Arkansas. To locate news sources in these states, add location:Montana (etc) to your google news search for health reform.

I'm still working on emailing that list of senators, I had to write a special letter for Baucus...

"All those nice perks you receive as a senator will go poof when you lose your job. You aught to try a little harder to at least appear to represent your constituents. They are not fooled when you try to tell them what they want, and they are not going to take 'I can't' for an answer. Have you noticed lately that although the 'right' screams loudly, the supporters of real reform (ie public option or single payer) shake the very ground with their numbers? No amount of spin or focus in the media is going to change the numbers on election day. The people want real reform, this means at least a robust public option. It is your job to argue for them and get the votes in the senate. Remember, your paymasters may be corporations, but the people hired you, and they can fire you."

[DIdaho]

I apologize if this is redundant. I never know when or whether something will post.

But this is fundamental. If we don't have a public option, we have what we have - a private option. And this is not funded from some "free" group of sign wavers, it's funded by employers. How in God's Green Earth did a "conservative, pro-business" option somehow get the idea that paying for American's health care was the responsibility of American business? Sure, I know the history. Wage controls means benefits were the only way to raise actual wages. But come on. These "pro-business" Republicans stake their claim on insisting that business fund health care?

News flash, guys. It's killing me. It's killing employment. It costs me more than all other taxes combined. That's your answer? To promote business make me keep paying another 30% per year more for health benefits? Seriously? That's your program? To benefit me?

What planet are you on? That if there are no taxes, no public option, that it's free? Every dollar that does not come out of a public option comes out of my pocket.

We're not talking apples to apples. What the Republicans are saying is they want private business to assume what's a public burden. At maybe twice the cost. WTF! This makes sense? This is supporting private enterprise? What Republicans support in the name of "private enterprise" is destroying "Private enterprise."

[teccoord]

The President knows some form of Healthcare reform will occur. He must suggest in some way or another that he is willing to compromise. That will be progress for the Healthcare reform package.
The President must be inclusive to those in opposition to his legislation. He must remind the people that over the years there were thousands of complaints about our current Healthcare system.
The President should attempt to explain that the legislation will improve the HMO and PPO concepts along with other improvements to our current Healthcare system.
The President should list out the current Healthcare complaints that people have. He should also discuss the role of Healthcare Insurance companies and the controls they have over us as healthcare enrollees.
The President must inform us how Medicare Works. He must clearly state that Medicare is a Government program for seniors or for those that attain the age of eligibility. He must state clearly it is a Healthcare system. The President must also indicate the Healthcare available to Government employees … including employees in all the branches of government … He should state the positive and negative aspects of this Government program. The President should clearly state that we have government care for our Veterans and active military.
Mr. President, it is up to you to inform and teach so that your students of Healthcare improvements will not flunk your knowledge test about your new and improve Healthcare system.

[chocolate]

This will take not only our elected officials, but all of us to get this program under way. We need to tell our senators and congressmen where we stand. We need to inform our misinformed friends of the truth, that all the talk about "death panels" and such are just lies to scare people.
It's easy to find out how medicare works,. Get on the internet and there are plenty of organizations to help people understand it. Then explain to those you know who are misinformed.

Here's the short version. You pay about $97 a month for Medicare which covers a percentage of hospital expenses. Most people also purchase supplemental coverage which fills in where Medicare does not pay, such as deductibels, doctor's bills. You have the choice of many different supplemental offerings. Mine costs $82 a month. I also pay a small separate sum for prescription coverage. You can change your coverage once a year. So if you start out not needing a lot of supplemental coverage and then get a diagnosis that will clearly require a lot of medical treatment, you can upgrade to a higher level. You design your own program.I have some serious medical issues so I chose a higher level of coverage. I am paying about $200 a month for Medicare and supplemental coverage and prescriptions. The program is subsidized by taxes we have all had deducted from our paychecks. I wish this program was available to everyone.

[teccoord]

First ... Where in the legislation does it indicate that the existing health programs must proceed as they are currently designed? This is not legislation to change Healthcare; it is legislation to Regulate the Insurance Healthcare system, a system that has a very powerful lobby. It is time to make some adjustments to the Healthcare Insurance system.
Second ... Where in the legislation does it indicate that there are no changes for programs currently operating? You know that there are changes because there are new regulations.
Third ... Where in the legislation does it indicate what I must do if I lose my job, have no money, and need insurance?
Fourth ... Where in the legislation does it indicate what must happen with those individuals that are not citizens of the United States? What about individuals that cannot identify who they are. What will happen with their services?
Fifth ... Is there any part of the legislation that pertains to tourists visiting this country? What services are they entitled to, who pays, and will travel insurance be mandatory for tourists coming to the United States?
Sixth … why does the legislation have to be so complicated??? Simplicity simplicity simplicity.
Seventh … why not a consortium or co-operative of insurance companies to cover the costs of the uninsured?
Eighth... Where is your Transparency list of Lobbyist and other Special Interest people or groups coming in to see you????

[teccoord]

Healthcare is commerce. The constitution states clearly that the government has the right to establish legislation with respect to commerce. Hence, legislation regarding Healthcare and in particular the Healthcare Insurance companies is appropriate.
Article I describes the duties and powers of congress. Section 8., is very important as to the responsibilities and the areas in which the congress can legislate.
Article II sections 1., and 2., clearly state the duties of the President. He will from time to time give the state of the Union to the Congress, and the President can provide Measures he feels are necessary and expedient. There does not seem to be any limits as to what the President wants to present to Congress.
This is not legislation to change Healthcare; it is legislation to Regulate the Healthcare Insurance companies. The Healthcare Insurance companies have a system consisting of a very powerful lobby. It is time to make some adjustments to the Healthcare Insurance system.

[teccoord]

The Healthcare anger … I am mad as hell and won’t take it anymore.
1. While healthcare is generally ok, we don’t get the health care we always need.
2. Our doctors are the keepers of the key to other services based upon to whom the Group reports.
3. The HMO controls the care we can get and the treatment we might need.
4. The services provided by the labs are very slow.
5. The time with the doctor is limited.
6. The doctor is required to maintain volume patients per hour versus quality care.
7. Our hospitals are pressured to provide diminished care do to patient overload.
8. The current system is controlled by the Insurance companies that created the HMO or PPO service that one can select to get the Healthcare service THEY provide.
9. The Group assigned to the Insurance Company is totally controlled by the Insurance Company in terms of available services.
10. Our current Healthcare is controlled by the Lobbies of Independent insurance companies and Pharmaceutical companies.
11. The Healthcare Insurance companies are run by a Board of Directors and stock holders. This makes a service oriented industry to be heavily profit motivated and hence diminish service to the members of the established HMO or PPO or other Healthcare setup.

[mnyegele]

When I started teaching for LAUSD in 1978, I enrolled in Blue Shield, a non profit health insurance company. Soon Blue Shield merged with Blue Cross. Then, without asking my permission, Blue Cross became a for profit company. Now, without asking my permission, they are running cutesy ads on television. They will pass the costs on to me - or rather my employer LAUSD.
Actually, LAUSD pays my health insurance premiums, and LAUSD gets its money from the tax payer. In addition, to paying for my health care, the taxpayer of California is paying for the profit that Blue Cross provides its stockholders, the multi-million dollar salary of the CEO, lobbyists that descend on Washington like locusts from a Biblical plague... and, they also make political campaign contributions to Republicans who want to kill the public option.
Suppose I could have bought into a public plan - like Medicare. How much money would that have saved the taxpayers? Supposing every teacher in Los Angeles did the same. In fact, a few years ago state senator Sheila Kuehl proposed a single-payer system. UTLA discovered that LAUSD could save between $ 100 to $ 200 million dollars a year if it enrolled all its employees in a single payer system. What savings would occur if all public employess enrolled in Medicare?
Why doesn't any one mention this? And, why don't we know how much money private insurances companies are donating to Congressional election campaigns? These are truths that need to be told.

[STILJON]

The same way opponents for healthcare reform have overwhelmed people with lies and baseless fear, proponents of healthcare reform have to aggressively overwhelm people with all the advantages and benefits of the current healthcare reform proposals so they find it irresistible. The only reason we have lost the 65% support we had for healthcare reform is because we have allowed ourselves to be distracted by negative campaigning instead of sticking to the issues and overwhelming people with everything they will get from the current proposals for healthcare reform. As news coverage, including this article, increasingly focuses on criticizing Republicans and Democrats no one is getting the message about how incredibly beneficial the current health care proposals are for everyone. Please start countering all the lies and baseless fears opponents are spreading by spending most of your time laying out the long list of facts that illuminate all the advantages of the current health care reform proposals that will actually confront the fears being raised. I liked a lot of the points raised in this article but am continually disappointed when criticisms are not countered with the benefits of alternatives. The only way we sell someone something is by showing them what they get.

[ApolloSpeaks]

Was the CBO lying when it said that the president's plan would add 100s and billions to the deficit? Who was the liar? Obama or the CBO?

[Ankhst]

I suspect it was the CBO, indirectly. If the burden of health insurance/health care funding is passed from the employers to the government (via taxpayers), then the employers suddenly have an improved bottom line -- which can easily "politically fund" significant increases in the minimum wage (how can businesses fight when they just got a huge favor?), and wages in general. Higher wages mean more income taxes collected, regardless of whether taxes stay the same or are raised. The important assumption here is that the government-funded healthcare system will cost quite a bit less than the private healthcare system -- and with profit motives and executive salaries, how can that not be the case? This should significantly offset the "100s and billions" -- if not completely eliminate them.

By this logic (and you of course must decide for yourselves how sound it is), the net cost to the govt is almost certainly less than 100s *of* billions (let's work on that grammar, shall we?) if not in truth a net savings to the govt., which *could* be expressed as a reduction of the deficit -- though I'll admit that probably won't happen soon, since there are many other areas in need of govt. spending (e.g. infrastructure/job creation)

[baseline]

Go health care reform!

[Balloonman]

MANDATED INSURANCE: In my 20's-30's employers offered HEALTH thru BLUE CROSS. Premium? Comes to mind $8 or was it $18 a month? I turned it down for years. Never got sick enuf for a hospital stay, and doctors visits I could afford. Tests included. (My Mother's two weeks hospital for complications birthing me was $114). Selling automobiles averaged $500 to $700 a month. Rent $65 for a Murphy wall twin bed single. Cigarettes 20 cents. Coffee a dime. Gas 47 cents if that. Bang out a fender $100 on up. Dents in REAL bumpers the same. Car insurance? Started in Massachusetts 1927, most States required it after War II but not all, now all States do. What was auto insurance a year in CA in '60? About the same as BLUE CROSS coverage I recall. Point? The Monster Insurance became/is. Costing an arm and a leg, stinging instead of protecting us from impossible individual costs due misfortune, and in reasonable premium cost relative average income. Any insurance was arbitrary once in 'simpler' times. People, or people set up group funds took care of their own. Greek/Roman ships went down, any loans made on cargo were cancelled. Houses burned down, neighbors put one up. But Insurance once instituted on people and their property, then mandatory, fortunes are made. Virtually EVERYBODY prey, a forced customer. Ring a bell? For mandated health insurance? Now INSURANCE and exponential network is too big to fail, to regulate proper. Such a business!

[Amplifryer]

The only thing that I've heard that will get enough people on to this reform initiative is mandating a cap on premiums and regulatory fixing of certain health costs. Insure all, and have everyone pay into the system.

Open up interstate commerce so the 1300 insurance companies can better compete by eliminating 50 different states worth of mandates and substituting them with a uniform slate of federal mandates. Bust up monopolies where they exist like what was done with Ma Bell. Opening up competition would result.

This would force costs reduction versus pushing up prices on the backs of the consumer. Insurance firms could then act as arbiters of price with the providers, this would be their only avenue to increase margin with a cap on premiums. Allow them to keep a percent of savings from negotiations the rest would be passed onto the consumer. Providers would be forced to disclose negotiations to gov that provides oversight framework.

Let the government do what the do best, regulate, and be the referee making sure the consumer is protected. Insurance would be much better at negotiating and they have the necessary business acumen to make effective arbiters putting the impetus on lower cost versus inflating costs

[Ankhst]

I largely agree except for "Insurance would be much better at negotiating". The negotiating power is not held in the experience, but the customer base. One giant pool of public-option opt-ins vs. necessarily smaller pools of private insurer buy-ins, no contest (UNLESS the government "chooses"
-- i.e. is well-paid by private insurance lobbyists -- to not really exercise that power, a la Medicare Part D, and [if rumors are true] Obama's capitulation to Big Pharma re: drug price negotiation)