Health insurance cooperative
A health insurance cooperative is a cooperative entity that has the goal of providing health insurance and is also owned by the people that the organization insures. It is a form of mutual insurance.
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It has been proposed as part of the healthcare reform debate in the United States by the Barack Obama administration as a possible compromise with Blue Dog Democrats (as well as with Republicans) in the search for universal healthcare in the United States. As it is being proposed by President Obama and others, a future health insurance cooperative would not be government owned or run, but would instead receive an initial government investment and would then be operated as a non-profit organization.
While a health insurance co-op is not strictly run by the government, hence not making it a public entity, it has been described by Senator Max Baucus of Montana, who is also the chairman of the United States Senate Committee on Finance as "tough enough to keep insurance companies’ feet to the fire." He has proposed a bill that includes a health insurance cooperative instead of the public option.
There once were numerous rural health cooperatives established by the Farm Security Administration (FSA). Most of them closed or merged over the years, generally because they lacked a sufficient economy of scale (i.e., they were too small to function efficiently). Thus, co-operatives currently have so little market share as to be "invisible".
The bill proposed by Max Baucus, the America’s Healthy Future Act, which uses health insurance cooperatives, was estimated by the Congressional Budget Office to cost $829 billion over ten years, and because of the increase in taxes of $210 billion over 10 years on premium insurance plans with high benefits, would lead to a reduction in the deficit of $81 billion. It would expand coverage to 94 percent of all eligible Americans.
During a September 2009 report by John King of CNN, he stated that "supporters know, here in Minnesota and other farm states think co-ops could solve at least a big chunk of the healthcare access and affordability problem." He interviewed Bill Oemichen, President of the Cooperative Network, who remarked that "where co-ops are, they tend to be very, very high quality because it is the consumer who owns them, that is making sure that their health care provider is a quality health care provider." Oemichen also stated that 65% of those who switched from typical health insurance reported better coverage and service.
In June 2009, Republican Senator Chuck Grassley told reporters, "if it’s all done entirely within the private sector, you know, it doesn’t seem to me it’s got the faults that you have... by having the government institute something." Steven Hill, a program director at the New America Foundation, has written for Salon.com that "co-ops may hold the key to a substantive compromise", comparing the U.S. reform proposals with health care in Germany. He argued that they can produce quality care for less money given that they would lack the profit motive, they would negotiate fees for service, and that they would end current market monopolies that insurance companies have in several states.
Howard Dean and other Democrats have criticized abandoning the idea of a federally run, statewide, public option in favor of co-ops, questioning whether the co-ops would have enough negotiating power to compete with private health insurers. The activist groups SEIU and MoveOn.org have also stated their opposition. Prominent economists such as 2008 Nobel Economics Laureate Paul Krugman and Robert Reich have also questioned co-ops' ability to become large enough to reduce health care costs significantly. Thus, they both support the public option instead, which they state has strong opposition from the insurance industry.
- Everspring Health
- Kentucky Health Cooperative
- Evergreen Health Cooperative
- Consumers Mutual Health Insurance of Michigan
- Health Republic Insurance - New York, New Jersey, Oregon
- Nevada Health CO-OP - Nevada
- Of the 29 health insurance co-ops created through the Affordable Care Act (ACA), fewer than 3 remain fiscally stable. Only two are thought to be able to remain beyond 2016."What Is a Health Insurance Co-op? (Health Insurance Cooperative)" About.com: Patient Empowerment Retrieved on August 17, 2009
- "White House appears ready to drop 'public option'" Retrieved on August 17, 2009
- "White House Appears Open to Insurance Co-ops" New York Times Retrieved on August 17, 2009
- "Chances Dim for a Public Plan" The Wall Street Journal Retrieved on August 18, 2009
- "President Obama Considering Insurance Co-Op" KKTV.com Retrieved on August 17, 2009
- "Co-op Health Plan Emerging as a Senate Option" New York Times Retrieved on August 17, 2009
- "Zen Health Reform" - Slate.com Retrieved September 18, 2009
- Michael R. Grey. New Deal Medicine: The Rural Health Programs of the Farm Security Administration. Baltimore: Johns Hopkins University Press. 1999.
- The Atlantic, "New CBO Score Of Baucus Bill" 07 Oct 2009
- "The Baucus Bill Cuts The Deficit" - theAtlantic.com Retrieved October 7, 2009
- "Health bill would cost $829B, help cover 94 pct" - Seattle Times Retrieved August 7, 2014
- John King (September 6, 2009). "Interview With Senators Klobuchar, Nelson; Interview With Governor Pawlenty". State of the Union with John King. Retrieved September 21, 2009.
- Wangsness, Lisa (June 21, 2009). "Health debate shifting to public vs. private". Boston Globe. Retrieved September 21, 2009.
- Robert Reich's recent references to health insurance cooperatives
- Paul Krugman (September 17, 2009). "Baucus and the Threshold". The New York Times. Retrieved September 21, 2009.
- Looking At Health Care Co-ops at Planet Money.
- Health Democracy: How to Liberate Americans from Medical Insurers (book).