Compromise Co-Op Proposal Won't Lower Costs, Government Study Showed

Rightardia comments: We wrote two articles on co-ops and pointed out hat co-ops are small potatoes in the health insurance industry. Without a law change that creates super-co-ops that can operate across state lines and are regulated by the government, the health care giants will buy the co-ops out like they did to the non-profit, Blue Cross.

Rightardia is not against co-ops, but a public health option is also needed like the the rest of the industrial world uses.

The health care reform compromise that centrist Democrats and several Republicans have indicated they'd support has shown an inability to effectively lower premiums for consumers, a newly resurfaced government study shows.

In recent days, a slew of lawmakers, notably Sens. Kent Conrad (D-N.D.) and Richard Shelby (R-Ala.), have begun a renewed push to establish health care insurance cooperatives as an alternative to a publicly run insurance plan.

But there's a study at hand that undercuts the argument that co-ops would drastically alter the health insurance market.

The U.S. General Accounting Office produced a report on cooperatives in March 2000 that was mostly sour on the idea. Using five different co-ops as examples, the study concluded that on the key function -- lowering the cost of insurance -- these non-profit insurance pools came up well short.

"The cooperatives' potential to reduce overall premiums is limited because

1. They lack sufficient leverage as a result of their limited market share

2. The cooperatives have not been able to produce administrative cost savings for insurers;

3. Their state laws and regulations already restrict to differing degrees the amount insurers can vary the premiums charged different groups purchasing the same health plan."

See the complete Sam Stein article at http://www.huffingtonpost.com/2009/08/17/compromise-co-op-proposal_n_261044.html

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