Health care co-ops: Strategy for killing real reform

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U.S. House and Senate health care reform bills that have won committee approval contain a public health insurance option as a vital component and that, says a new report released this morning, “is considerable cause for celebration.”

The report’s author, Yale University professor Jacob S. Hacker, also warns that efforts to push health care cooperatives, which recently have been floated as an alternative to a public option, are meant

“to kill the public plan and, with it, the prospect of an effective competitor to consolidated insurance companies that have too often failed to provide affordable health security.”

The report, commissioned by the Institute for America’s Future details how a strong public health insurance plan is critical to successfully achieving the goals of health reform—lower costs, higher quality and guaranteed health security for all Americans.

A public health insurance plan option would allow working families to keep their current employer-provided coverage or, if they have no insurance, choose between a private plan and a public plan that offers quality care. Says AFL-CIO President John Sweeney:

A quality public health insurance option is a crucial part of health care reform to keep private insurance companies honest, hold down costs and ensure that everybody has a health care choice available.

The House bill (H.R. 3200), approved by three committees, and the Senate version (The Affordable Health Choices Act, no bill number yet) passed by the Health, Education, Labor and Pensions Committee, both call for a public plan option, but contain some differences in the way such a plan would operate.

However, leaders of the Senate Finance Committee, which has yet to produce a bill, have dropped support for a public plan option and endorsed health care co-ops-yet provided few details of how the co-ops would operate.

Hacker, who calls the co-ops cop-outs, says:

There is absolutely no reason to think that cooperatives of any sort could achieve the three crucial goal that a competing public plan must accomplish—provide a backup option offering health and financial security to individuals without employer coverage, a cost and quality benchmark, and a cost-control backstop that drives payment and delivery system reform.

The report, Public Plan Choice in Congressional Health Plans, examines the differences in the legislation and finds there are three “crucial provision” that would ensure a public options can compete on level playing field with the private insurance industry, produce cost savings and provide broad coverage.

* Medicare “tie-in” that allows the public plan to develop a broad national provider network with competitive payment rates quickly;
* Creation of a competitive exchange that can give a range of business, as well as uninsured Americans, access to the public plan and regulated private insurance options; and
* Providing the public plan with enough authority to reduce medical inflation through drug-price bargaining and innovations in the financing and delivery of care.

Rep. Raul Grijalva (D-Ariz.), chairman of the Congressional Progressive Caucus—most of whose members have said they will not support a health care reform without a public option—puts it this way:

The public option is central to healthcare reform. Real reform, which lowers costs and ensures all Americans get the quality, affordable healthcare that they deserve, cannot be accomplished without a robust public option.