This week, the Senate Finance Committee voted down a measure for the federal government to offer its own insurance plan, the so-called public option. That same Senate panel is now offering an alternative — health insurance cooperatives.
Health care co-ops are owned by members who pay premiums and get to vote on a board of directors.
Sen. Kent Conrad (D-ND) is the chief cheerleader for co-ops. Conrad says the federal government would need to support new co-ops at the outset. The measure calls for $6 billion in startup assistance. In the end, he says, co-ops would save money and provide good care.
"Because these plans will be owned by their members, they will focus on getting the best value for consumers, rather than maximizing plan revenues or profits," he writes on his congressional Web site.
Currently, two major health care co-ops operate in the U.S. — HealthPartners in Minnesota and Group Health Cooperative in Seattle. Both function like regular insurers. At Group Health, less than 1 percent of the members actually sign up for a ballot and vote. Pam MacEwan, vice president of public affairs at Group Health, says she's taken aback by the attention from Congress.
"We're surprised the discussion of cooperatives has gone as long as it has," MacEwan says. "Co-ops aren't a magic bullet."
Conrad's bill calls for expanding health care cooperatives into all 50 states. There's hardly anyone, anywhere who has studied whether adding more co-ops would make any difference.
Timothy Jost, a law professor at Washington and Lee University School of Law, is one of the few people who have researched them. Jost suggests that the expenses involved in starting a co-op and the struggle for market share would kill off most of them before they got going. He says it's unlikely they'd make medical care any cheaper.
"Where I've seen cooperatives in operation, they don't really compete on price," he says. "They compete on quality, on customer satisfaction. That's good. We need more quality. We need insurance products people are really happy with. But what we need most is cost control."
MacEwan of Group Health says Jost's argument about cost rings true. She says her company's insurance is priced in the middle range of all the private insurers.
In the end, the main problem health care cooperatives solve may be a political one. People who oppose a public option for health insurance might back an alternative that's not run by the government. And people who support a public option might look to co-ops as the next best thing.
Keith Seinfeld reports for NPR member station KPLU in Seattle.
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