Update 8.19.09: The progressive reaction to the apparent sellout by the White House was loud and clear. 65 Democrats in the House are solid behind the public option, and the White House communications office has backed off. But whether 44 was sincere in his collaborationist rhetoric or just triangulating for political advantage remains to be seen. Stay tuned. The Senate Finance Committee led by Max Baucus, a tool of the insurance industry, continues to undercut the public option (translation: extending Medicare) with the amorphous proposal of creating "insurance cooperatives" to provide the necessary competition for the health insurance oligopoly that has failed to control the costs of medical services in this country. Incredibly, 44 indicated over the weekend that he was open to reform without a government run health insurance option, a position contrary to his campaign platform. Baucus has said that fighting for the public option is "a wasted effort".
The problem with the co-op idea is that it has been tried and found wanting. Dr. Howard Dean points this fact out in his new book on reforming health services. The largest health insurance co-op was Blue Cross/Blue Shield. The remaining BCBS organizations still in business are now franchises independent of the association selling branded health insurance in defined regional areas. The largest member of the Blue Cross/Blue Shield Association is WellPoint, a publicly traded corporation. Some of the franchisees are still operated as non-profit organizations. The association enjoys a close relationship with government health policy makers since it also administers Medicare in some areas and the Federal Employees Health Employees Plan. A GAO study in March 2000 said that co-ops cannot control costs because they do not have the necessary market share nor produce administrative cost savings for insurers. The study examined five different small business purchasing co-ops[1]. Without a large number of participants, co-ops are subject to the whims of the insurance industry which are decidedly anti-competitive. According to GAO cooperatives typically offer plans at market prices with similar benefits as plans outside the cooperative. Two thirds of non-elderly Americans rely on employer provided health insurance, but only about one half of very small employers (less than nine employees) offer health benefits.
Blue Cross/Blue Shield of North Carolina is running television ads against the public option plan. Ask yourself this question dear reader: why is a so-called coop so afraid of competing against the government plan if they are sure it will be a disaster? North Carolina BCBS excludes preexisting conditions, maternal benefits, and has other coverage limitations. It is not cheap insurance as Dennis and Alice O'Connor, a retired couple in Chapel Hill, found out. A previously stated goal of Team 44 in reforming health care is to provide all Americans with affordable insurance that does not prevent people with pre-existing conditions from obtaining coverage.
The problem with the co-op idea is that it has been tried and found wanting. Dr. Howard Dean points this fact out in his new book on reforming health services. The largest health insurance co-op was Blue Cross/Blue Shield. The remaining BCBS organizations still in business are now franchises independent of the association selling branded health insurance in defined regional areas. The largest member of the Blue Cross/Blue Shield Association is WellPoint, a publicly traded corporation. Some of the franchisees are still operated as non-profit organizations. The association enjoys a close relationship with government health policy makers since it also administers Medicare in some areas and the Federal Employees Health Employees Plan. A GAO study in March 2000 said that co-ops cannot control costs because they do not have the necessary market share nor produce administrative cost savings for insurers. The study examined five different small business purchasing co-ops[1]. Without a large number of participants, co-ops are subject to the whims of the insurance industry which are decidedly anti-competitive. According to GAO cooperatives typically offer plans at market prices with similar benefits as plans outside the cooperative. Two thirds of non-elderly Americans rely on employer provided health insurance, but only about one half of very small employers (less than nine employees) offer health benefits.
Blue Cross/Blue Shield of North Carolina is running television ads against the public option plan. Ask yourself this question dear reader: why is a so-called coop so afraid of competing against the government plan if they are sure it will be a disaster? North Carolina BCBS excludes preexisting conditions, maternal benefits, and has other coverage limitations. It is not cheap insurance as Dennis and Alice O'Connor, a retired couple in Chapel Hill, found out. A previously stated goal of Team 44 in reforming health care is to provide all Americans with affordable insurance that does not prevent people with pre-existing conditions from obtaining coverage.
[1] Pacific Health Advantage in California, CBIA Health Connections in Connecticut, Florida’s Community Health Purchasing Alliance are among the largest small employer cooperatives in the nation. GAO also examined two smaller cooperatives, North Carolina’s Caroliance and the Texas Insurance
Purchasing Alliance. BCBS Association identifies 21 purchasing cooperatives in the nation.