As the battle for healthcare reform rages on, many of the myths that I once expected to quietly die have instead become stronger and more entrenched. In particular, the degree of misunderstanding surrounding the “public plan” portion of healthcare reform proposals continues to astound me, both on the Right and the Left. I addressed some of those concerns in a post last week entitled “All About the Public Plan” and I think some of the misconceptions I discussed in that article have pertinence to the discussion of alternate reform mechanisms as well. Especially in regards to Co-ops, I think misunderstandings on the part of the Left have hobbled any chance at real discussion of this viable public plan alternative. So hopefully this will help clear some things up:

What is the Healthcare Co-op?

First off, it’s important to know that when we’re talking about co-ops, we’re not talking about the local health insurance co-operatives found in states like Wisconsin. CNN recently wrote an entire article while apparently operating under this misunderstanding, and pretty much all of the statements deriding co-ops that have come from Gov. Tom Pawlenty recently also fall into this category. We are talking about a single, national co-operative or small group of cooperatives, given special permission to compete nationally across state lines to provide competition to the overly-consolidated private health insurance markets. To fully understand this type of co-op, you should first go back and read “All About the Public Plan” if you haven’t already. Seriously, you won’t understand this article without it. I’ll wait… Okay, are you done? Do you understand what the Public Plan is? The Co-op is exactly the same, except administered by elected board members rather than government appointed officials. Literally, that is the only difference I have been able to come up with.

Disadvantages of the

Healthcare Co-op

Now I should clarify that the Co-op idea has the potential to be exactly the same as public plan proposals, and would likely function almost exactly like the public plan, but since no bill has actually been written up with a co-op component, we can’t say for sure yet exactly what it would be like. Sen. Kent Conrad, one of the first to propose co-ops in the context of the current healthcare reform debate has said that they could operate on a state level, a regional level, or a national level. It’s a national healthcare co-op that would function like a public plan. State or regional co-ops would probably be beneficial but would not have nearly the same strength in bargaining power as a national co-op or a public plan and thus would be a less formidable competitor to private insurers. So this remaining ambiguity is certainly one disadvantage to dumping the public option in favor of a co-op.

The only other reasonable argument I’ve heard against the healthcare co-op is that since administrators would not be appointed by the government, it’s not a guarantee that the co-op would remain dedicated to its original mission of lowering America’s insurance premiums. There’s not much to prevent the administrators of the co-op from pursuing the interests of their organization over those of the American people should they ever come into conflict. The primary situation in which that might occur would be if the co-op became too successful and threatened the fabric of our private insurance industry. In that situation, those not participating in the healthcare co-op would not have any direct input into its operations, while those who are members would have only an incentive to increase the size of their organization to grow their risk pool. Of course we’d still have some control over the co-op through legislation, but as we’ve seen that can be a slow and arduous process. In other words, a government administered program would theoretically give the American people (through our elected officials) somewhat more direct and time-sensitive control over how the plan operates.

Advantages of the

Healthcare Co-op

While I’ve stated several times in the past that I believe it to be very unlikely that a public plan would bankrupt private industry, it’s impossible to say that it could never happen. With that in mind a state or regionally based healthcare co-op plan would essentially eliminate that risk, which should ease the minds of conservative reform opponents.

But I think the primary advantage is political. It’s clear that, due to unfortunate naming, insurance company smear tactics, and the white house’s perplexing decision to sit back and let the wings define the debate for the first several months, the public plan has become a very, very controversial proposal. To many conservatives it has become synonymous with “Socialized medicine” and a “government takeover of healthcare”. If a strong, national, healthcare co-op would give us nearly the same result without the controversy then it seems like the logical choice.

I know some are frustrated with that option because they see it as a sign of giving in to misinformation. Yes it’s true that the Public plan has been unfairly smeared and is almost universally misunderstood. Yes it’s true that if it were abandoned, healthcare reform opponents would trumpet from the hilltops that they were clearly right all along and that their protests and screaming had succeeded in averting socialism. The liars would be gratified and the screamers would not learn their lessons, and that would be frustrating. But there will always be liars and there will always be screamers. One win or loss on one item of policy will not change that. Are we willing to accept no reform at all in place of a healthcare system with a strong national co-op, or even strong regional co-ops, for reasons that essentially amount to pride?

Unfortunately I’ve found that this is a frequent occurance in politics. Idealogues often get their way because they’re loud and more than willing to lie their faces off. But if anything is going to be accomplished then somebody has to compromise, and it won’t be them. And in the end, I think it’s less about who believes they won or lost and more about the end result for the American people. I think the most noble policy makers are those who pragmatically seek the best result for their constituents. They’re rarely anyone’s hero, they don’t often make the news, and they don’t have a rabid fan base since they’re not out there boldly and defiantly waving some ideological banner. But they’re the one’s we can thank for most of the positive change that has actually been enacted over the years.

Conclusion

So is the co-op the way to go? If that’s what we have to do to get a bill passed, then I say yes. And all signs from the Senate say that the public plan is a no-go there. I’m all in favor of a public plan, I think it’s the superior choice. But not by so much that healthcare reform is worthless without it. I think it’s wise to push the public plan as much as we can and fight the misunderstanding that’s out there. But when it becomes clear that it will not succeed, we need to accept the co-op and move forward as quickly as possible, before the next smear campaign has time to gain momentum. I really liked what Pres. Obama had to say about this subject in his healthcare address last week actually. and I’ll let his words close out this article.

“It’s worth noting that a strong majority of Americans still favor a public insurance option of the sort I’ve proposed tonight. But its impact shouldn’t be exaggerated – by the left, the right, or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.

For example, some have suggested that that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can’t find affordable coverage, we will provide you with a choice. And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.”

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