Senate GOP members push health co-op rather than public-option health plan

It seems that the so-called "public option" may be the issue that does the most to try to get the patients of both parties engaged in the health reform debate. While Democrats in the Senate are preparing to side with some Republicans to back a plan with no government-run health insurance option, House Democrats are still fighting tooth and nail with their GOP counterparts to find any point of agreement.

Senate Finance committee members seem to have made their peace with a plan that includes not a government-run plan, but a non-profit cooperative option to compete with private insurers. These co-ops, a few of which already exist in regions of the U.S., are owned and controlled by their members. One well-established co-op, Seattle-based Group Health Cooperative, has about 600,000 members and has been in business since 1947.

Sen. Kent Conrad (D-ND), who's the leading champion of this concept, is proposing that the government provide initial start-up money to fund the cooperatives across the U.S., though they'd be required to become self-sustaining by collecting consumer premiums.

The problem with Conrad's approach is that while it might indeed work, it could take quite some time for a national co-op or set of co-ops to set up shop, as building relationships with physicians and hospitals can take quite some time, notes Karen Davis, president of the nonprofit Commonwealth Fund. A public option, meanwhile, allows the government to use the purchasing power of the Medicare system to get more providers to come on board, she notes.

Ultimately, the question none of the legislators seem to be asking, at least publicly, is whether anything but a public-option plan will do anything to pressure private insurance to change their ways. And let's be honest, that is the key reason for implementing such a plan.

Oh, and by the way, health plans, if you don't like having to compete with a government plan that could come in 20 percent lower than your best offer (see the Lewin report story in this issue), would you prefer having legislators get fed up and demand you come in lower, by law? One way or another, something big is going to change here, so shooting down the current options may not be so smart.

To learn more about this dilemma:
- read this Los Angeles Times piece [1]
- read this Reuters piece [2]

Related Articles:
AHIP opposes creation of government health plan to rival private insurers [3]
Including public option plans could save U.S. $265 billion, report says [4]
Grassley: Public option a 'deal-breaker' [5]