R i g h t a r d i a: Sebelius: Public Health Care Option "Not The Essential Element"

Rightardia comment: The problem with the cooperative is that it can be co-opted by the private insurance agencies like Blue Cross was. Keep in mind,too, that non-profits and not-for-profits can give large salaries, bonuses and perks to management to give the appearance of low profitability.

These coops would have to get start up money from the government and would also have to heavily regulated to prevent private industry from taking them over. It would have to be something distinctly different from coops of the past.

Readers should consider the United Way scandal. A letter warned that the charity was being looted by its president, William Aramony,who was romancing a young woman.

In late 1991, a source at the national office revealed that Aramony flew first class, sometimes on the Concorde, used chauffeur-driven limosines and lavished expensive gifts on friends.

The United Way of America's board of governors hired outside investigators in December, 1991. The auditors were instructed to review the books and examine accounting procedures within the agency.

The auditors biggest criticism was that documentation was lacking to distinguish business expenditures from personal charges. The outrage from local United Way organizations across the country was overwhelming. Many disaffiliated themselves and discontinued their 1% "contribution" of dues to the national office.

During a teleconference on February 27, 1992, Aramony announced his retirement with full pension benefits as soon as a successor was chosen. Until then, he would continue to receive his $390,000 salary and $73,000 in other compensation.

Later that year, Aramony was charged, along with CFO Thomas J. Merlo and Partnership Umbrella President Stephen J. Paulachak,in a 71-count Federal indictment of defrauding their organization of $1.2 million through misuse of leave salary, misreporting expenses such as billing private travel as a company expense, and drawing retirement benefits from the United Way of America retirement fund while he was still working there.

Mr. Aramony was convicted in the U.S. District Court for the Eastern District of Virginia on 25 counts including conspiracy to defraud, mail fraud, wire fraud, transportation of fraudulently acquired property, engaging in monetary transactions in unlawful activity, filing false tax returns and aiding in the filing of false tax returns.

Joanthan Alter discussed coops on the Keith Olbermann show:

ALTER: Well, there has to be some kind of cooperative, maybe what they call a souped-up cooperative, one that can actually withstand pressure from insurance companies which in the past have taken something like BlueCross, which is originally nonprofit and turned it into just another insurance company. So, the problem with the co-op idea is that it-they have been putty in the hands of the insurance company. But there still is room for compromise there. They could design a new kind of co-op that could provide some real competition.

OLBERMANN: Yes.

ALTER: It could be essentially a public-private option that satisfies enough people to get something through. So, I don't think liberals should go, you know, public option or bust. There are other alternatives and you have to remember that there are many, many important things in this bill that have become almost non-controversial that two years ago, if you'd been told they're going to-they're going to end discrimination against people with pre-existing conditions, they're going to insure another 30 million Americans, we say, "Great, where do we sign up?" And now, some progressives are-maybe a little bit too wed to the public option. Even though, my favorite, too, but we shouldn't go down with the ship, with the public option.

WASHINGTON - Bowing to Republican pressure, President Barack Obama's administration indicated it is ready to abandon giving Americans the option of government-run insurance as part of a new health care system.

Facing mounting opposition to the overhaul, administration officials left open the chance for a compromise with Republicans that would include health insurance cooperatives instead of a government-run plan. Such a concession probably would enrage Obama's liberal supporters but could deliver a much-needed victory on a top domestic priority opposed by GOP lawmakers.

Officials from both political parties reached across the aisle in an effort to find compromises on proposals they left behind when they returned to their districts for an August recess.

Obama had sought the government to run a health insurance organization to help cover the nation's almost 50 million uninsured, but he never made it a deal breaker in a broad set of ideas that has Republicans unified in opposition.

Health and Human Services Secretary Kathleen Sebelius said that government alternative to private health insurance is "not the essential element" of the administration's health care overhaul. The White House would be open to co-ops, she said, a sign that Democrats want a compromise so they can declare a victory.