Consumer Watchdog, a consumer advocacy group in Washington, DC, today issued a press release criticising Senator Kent Conrad’s (D-ND) health insurance cooperative proposal. Consumer Watchdog claims that the co-op model is a failed one, largely because co-operatives have failed to generate enough membership in order to negotiate the best rates. In addition, the consumer advocacy group claims that co-ops could be used to reduce the effectiveness of state consumer laws.
The group cited the recent failures of three co-ops over the past decade, including the Florida Community Health Purchasing Alliances; the Texas Insurance Purchasing Alliance; and the Alliance in Colorado. Reasons for failure, according to Consumer Watchdog, included low enrollments and an inability to attract large employers.
The co-op proposal has moved to the front burner since the Obama administration’s signal over the weekend that it may not hold fast to a requirement that government-sponsored health care be included in legislation, much to the ire of liberal voters and a number of congressmen. Spokesmen for the administration have spent the day reiterating Mr. Obama’s preference for a public option.