Healthcare co-ops losing traction in Senate

The Senate Finance Committee's bill recently gained momentum from the Congressional Budget Office's (CBO) favorable cost analysis, but the health insurance co-ops proposed in the bill may be the first casualty of that report.

Chairman Max Baucus (D-Mont.) and his committee proposed health insurance co-ops as an alternative to a public option. However, the CBO report blasted the co-op concept and is now being used to fuel attempts to push a modified public option. Senators are feeling a revived sense of urgency to return to the concept of a public option since the report makes it difficult to justify the co-op plan to the public.

The newest proposal on the modified front would create a national government health insurance plan with a measure that allows states to opt out. Many lawmakers believe only a handful of smaller states would exercise the option and skip the national plan. If the public option works well, however, political pressure is expected to build on politicians in the opt-out states, forcing them to join the national plan over time.

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