WASHINGTON (Gannett) — A government-run health insurance option is facing stiff opposition at many town hall forums around the country this month.
Health insurance cooperatives are one alternative, but people in many parts of the country already have nonprofit health insurance through Blue Cross plans and Kaiser Permanente.
Lawmakers in Congress must decide whether co-ops are a viable compromise in the effort to insure more people and bring health care costs down, or whether they’d duplicate existing options.
Question: What is a cooperative?
Answer: A cooperative is a group of people who band together to purchase a good or service, whether it’s farmers in rural America who band together to buy seed, or apartment dwellers in a big city who purchase a share of the building where they live. In the insurance industry, State Farm is a cooperative that provides liability coverage to homeowners and owners of cars and trucks.
Q: Do health insurance cooperatives exist now?
A: Yes. Healthcare Service Corporation owns the Blue Cross plans in Illinois, Texas, New Mexico and Oklahoma. Another health insurance cooperative that’s getting attention is the Group Health Cooperative in the Puget Sound area in Washington state.
Q: Are other Blue Cross plans cooperatives?
A: Some are. Many Blue Cross plans are nonprofits, which, like cooperatives, aren’t subject to corporate income taxes. But an increasing number of the Blues have converted to the for-profit model.
Q: Why are cooperatives seen as less controversial than a government plan?
A: Critics of a government health insurance option (which would be in addition to the existing government health programs of Medicare for the elderly and Medicaid for the poor) say it would put private insurers out of business and would move the country closer to a controversial "single-payer" system in which all health care would be provided by the government. Cooperatives are viewed as a more market-oriented approach.
Q: What is the biggest drawback of cooperatives?
A: Critics of health insurance cooperatives point out that many are too small and weak to have an impact on the health system. Consumer Watchdog, a consumer advocacy group, says purchasing cooperatives formed in Florida, Texas and Colorado to provide health coverage to small businesses failed to attract enough customers to become viable.
Q: Would federal government support for cooperatives be able to control costs?
A: It depends on how they are set up. Gerard Wedig, a health economist at the University of Rochester Simon Graduate School of Business, says the debate over co-ops vs. a government plan doesn’t get to the heart of the issue: containing rising costs. "Either you have the insurance companies go back to managed care techniques or you make people responsible for paying for those (expensive medical) tests with high-deductible health plans,” he said. "There’s not an easy solution to the cost puzzle."
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Contact Brian Tumulty at [email protected]
