Health co-ops: not dead yet!

Last summer I got sucked into a raging blog debate on whether healthcare cooperatives are a suitable solution to our national health care crisis. It was a pretty stressful period and I must admit that I was relieved when the whole thing subsided: As the various Senate bills were mashed together, the public plan apparently came out on top, meaning (I thought) that cooperatives were no longer set to be the focal point of a huge and messy national experiment about how to fix a possibly unfixable problem. Then the various bills were combined into an enormous pile of legislation that no mortal can hope to understand. Meanwhile, I got distracted by travel and lost track of this particular issue.

Just for kicks, this weekend I decided to scan HR 3590, the 2,074-page $848 billion Senate bill that just made it to the floor for debate and (probably) further expansion. I thought maybe there might be some remnant of the co-op plan. There is obviously a lot of other stuff tucked away, so why not co-ops? Sure enough: 13 matches. Still, that’s only about one hit per sixty pages of text. No reason to get excited.

But there, on p. 168, I found Sec. 1322. “FEDERAL PROGRAM TO ASSIST ESTABLISHMENT AND OPERATION OF NONPROFIT, MEMBER-RUN HEALTH INSURANCE ISSUERS.”

A whole section? Curious.

As I started looking deeper, I discovered what appears to be the Finance Committee’s old “CO-OP” plan slapped onto the main bill alongside a public plan. I first thought that this might just be a backup for states that decide to “opt out” of the public plan, but I really don’t think that’s the case here. For starters, check out subsection (b)(2)(A)(iii) (on p. 169), which states that the Secretary shall

ensure that there is sufficient funding to establish at least 1 qualified nonprofit health insurance issuer in each State, except that nothing in this clause shall prohibit the Secretary from funding the establishment of multiple qualified nonprofit health insurance issuers in any State if the funding is sufficient to do so.

So how much funding are we talking about here?

There are hereby appropriated, out of any funds in the Treasury not otherwise appropriated, $6,000,000,000 to carry out this section. (from p. 179).

Yikes. That’s the same number the Finance Committee was using last summer.

Still, not wanting to get all wound up over nothing, I reasoned that this is just a remnant that was pasted in as part of the usual congressional horse-trading. Even if it survives the Senate debate, it is sure to be eliminated during the process of reconciliation. After all, the House has never seriously been considering this approach. Right?

Right?!?

Just in case, I decided to take a look at HR 3962, the bill already passed by the House of Representatives November 7th.

And I’ll be darned if Sec. 310 isn’t titled “HEALTH INSURANCE COOPERATIVES.”

And it gets right down to business, in Subsec.(a): (pp 212-213)

Not later than 6 months after the date of the enactment of this Act, the Commissioner, in consultation with the Secretary of the Treasury, shall establish a Consumer Operated and Oriented Plan program (in this section referred to as the ‘‘CO–OP program’’) under which the Commissioner may make grants and loans for the establishment and initial operation of not-for-profit, member–run health insurance cooperatives.

So I started looking for a dollar figure, and found that subsec. (b)(7) lays it all right out there:

There is authorized to be appropriated $5,000,000,000 for the period of fiscal years 2010 through 2014 to provide for grants and loans under this subsection.

Sweet baby Elvis!

Not only does the House bill launch the funding in just over ten months from now, but it clearly avoids one of the major complications of the Senate version, which uses a sneaky acronym (Consumer Operated and Oriented Plan) to blur the definition of cooperatives. The House uses the same label for the program, but is very clear that it is talking about cooperatives (in contrast, the Senate incorporates cooperative elements of democratic control and return of profits to members, but avoids true cooperative ownership).

It looks like the House bill is a significant step toward a co-op development plan that is likely to have generally positive results without blurring the definition of cooperatives. I don’t fully understand what this all means, but it seems to mean that cooperatives are back in play.

I’m still skeptical that government should be so deeply involved in co-op development, which is normally a process that tends to succeed when flows from grassroots discernment of a shared need. Don’t get me wrong. I still think that a “CO-OP” plan (however defined) would be less bad than a public plan, which would create another bureaucracy constantly subject to political struggles over abortion and the definition of family, and under constant threat of privatization.

And now that Sen. Lieberman has apparently drawn the line with his opposition to a public plan, just about anything is possible.

Whatever we might think of the “CO-OP” plan, it seems that the cooperative movement needs to start figuring out how we will respond to five or six billion dollars shoved in our general direction. To an extent this will be many local decisions, but if cooperative development is going to generally succeed at solving our healthcare crisis, it must be met by a high degree of coordination so that all the different state-based efforts will be able to learn from and support each other.

Our success will depend on our ability to cooperate.

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One Response to Health co-ops: not dead yet!

  1. coopgeek says:

    Right after I posted this entry, I was cleaning out my email and came across an announcement from NCBA that the CO-OP plan was still in play; it was sent last Thursday. So I suppose that it must have made some sort of subconscious impression on me and prompted me to go snooping. Thanks to NCBA for staying on top of this issue.

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