Health insurance co-ops have poor record

[IndianaGreen]

For those of you trying to fool other folks into thinking that a co-op is a viable public option, here is another point of view:

Health insurance co-ops have poor record

July 30, 10:07 AM
Healthcare Reform Examiner
Chuck Miller

In a report issued in 2002, The Commonwealth Fund saw several major problems with health insurance co-ops. (http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2002/Nov/Health-Insurance-Purchasing-Cooperatives.aspx)

It's final conclusion was that co-ops didn't do what they were supposed to do... give individuals and small businesses good health coverage at below-market costs.

Among it's findings:

1. The principal advantage that current co-ops offer to small employers is not lower premiums but the opportunity for individual employees to select different health plans from the variety the co-op offers.

Co-ops offer choice, but not lower costs. This fact was recently illustrated by the nation's largest health insurance co-op, Puget Sound Health, announcing a 13% rate increase for 2010, a larger increase than several of the major private insurers in the state.

2. In the future, co-ops might be able to offer more attractive prices, but that would depend on reaching “critical mass” size. Achieving critical mass size is difficult. To persuade a number of health plans to participate and continue participating, a co-op must have a significant market share. But without the participation of a variety of highly reputable plans, it will be difficult for co-ops to attract the number of employers that would yield a significant market share. But health plans and agents have often been hostile or, at best, indifferent, to the co-op model.

What co-ops depend on then is good private insurers offering good plans, even though it's not in their best interest to offer them. How likely do you think it is good private insurers will offer good plans to any federal co-op scheme they already want to kill?

If the co-op fails to deliver the co-op idea will be blamed, not the insurers. And in some way that would be true, since going in most healthcare experts think the co-op is a bad idea.

http://www.examiner.com/x-4380-Healthcare-Reform-Examiner~y2009m7d30-Health-insurance-coops-have-poor-record

On edit, adding Howard Dean's views on co-ops:

Dean Rejects Conrad’s Health Care Co-Op Proposal: ‘This Is Not A Real Compromise’

Last week, Sen. Kent Conrad (D-ND) floated a health care proposal intended to mollify conservatives who are upset over the possible creation of a public health insurance plan. Instead of offering consumers a government-run option similar to Medicare, Conrad suggests giving individuals and very small businesses the option to buy into a plan that would be run by a non-profit cooperative. The idea has gained the support of Democratic senators, including Max Baucus (D-MT).

The idea would be to create multiple state or regional non-profit co-operatives, operating through members who choose a board of directors and a CEO. Unlike Medicare, this model “would lack the market leverage to bargain for lower prices.”

This morning on MSNBC, former Gov. Howard Dean rejected Conrad’s proposal, saying it is “not a real compromise.” “This is a fix for the Senate problem,” he said, “this doesn’t fix the American problem.” After heaping praise on Conrad, Dean explained:

He’s wrong about this. The co-ops are too small to compete with the big, private insurance companies. They will kill the co-ops completely by undercutting them, using their financial clout to do it. In the small states like mine and like Senator Conrad’s, you’re never gonna get to the 500,000 number signed up in the co-op that you need to in order for them to have any marketing (power).

This is a compromise designed to deal with problems in the Senate. But it doesn’t deal with problems in America. And I think it’s time for the Senate to stop playing politics, do what has to be done. … If the Republicans don’t want to get on board, then we can do this without the Republicans.

http://thinkprogress.org/2009/06/15/dean-coop-proposal/

[quantass]

1. X-mas comes early for the Heath Insurance Industry -- R.I.P. USA (2009)

[stray cat]

3. I prefer cost containment efforts and insurance reform to the current practice

I don't like caps on my health insurance that if I reach I go broke. I like knowing my out of pockets expenses will be limited. I like knowing friends with pre-existing conditions will not be left in the cold. We don't have any of those things now.

[stray cat]

2. How viable is a public option that has to break even and gets no special deals?

[Turbineguy]

6. The problem there lies with adverse selection.

Healthy people get insurance, sick people get public option. It still saves money over the current system since some of the inefficient distribution of care is taken away. I.e. the hospital emergency room is no longer the primary care physician.

[uponit7771]

4. NASRO in California is inefective

[Turbineguy]

5. There's no problem with small co-ops.

As long as they don't take in sick people.

Which of course is the repub way to happiness. In the repub world, a cost which YOU don't have to pay is covered by magic money and nobody has to pay for it.

The fact is that we now already pay for all health costs in the US. And we also pay for a healthy profit margin for insurers and the inefficiency of badly distributed care. We pay for work days lost. We share in the costs of those who go bankrupt. The list goes on.

[Teaser]

7. except in Germany.

now, if they offered us German style coops, I'd jump at it. They prolly won't.

[rucky]

8. There's nothing preventing co-ops from being formed now.

If they were of value, we'd be seeing more of them.

I don't see what legislation has to do with it. Congress is ready to throw us a bone they fished out of the garbage.

[Vidar]

9. Thanks for pointing that out.

[IndianaGreen]

10. Watching Tweety today, I get the feeling they are going to sell us co-ops

as a "public option," and the same gullible people that fell for the bullshit line that the Iraq War Resolution "was not a war resolution" will promptly fall in line bleeping in unison that co-ops are a public option.