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Life Health > Health Insurance > Health Insurance

On the Third Hand: The PPACA CO-OP Program

By Allison Bell

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The federal Consumer Operated and Oriented Plan (CO-OP) program should be getting more attention than it does.

On the one hand, the fact that LifeHealthPro lets reporters write columns causes obvious problems. When I’m wearing my reporter hat, I want to be perfectly non-partisan and perfectly logical. Mr. Spock with a notebook.

When I’m a columnist, I suddenly have to reveal what everyone knew all along: That, of course, Mr. Spock was a seething cauldron of emotions and that, of course, I’m a seething cauldron of opinions. The real best reason for reporters not to reveal all of their opinions is not because reporters have to be so perfectly unopinionated, or because anyone is fooled by reporters pretending not to have opinions, but, because, really, why would anyone care what opinion the typical reporter has?

Reporters are, in ideal circumstances, experts at digging the good quotes out of a pile of boring quotes, not at health policy.

On the other hand: The CO-OP program — an outgrowth of the Patient Protection and Affordable Care Act of 2010 (PPACA) — seems an awful lot wackier than the PPACA individual health insurance ownership mandate or the health insurance exchanges.

States, private companies and other organizations have been setting up insurance exchanges for years. The worst thing that’s happened is that the exchanges haven’t worked very well.

The individual health insurance mandate may or may not violate the federal constitution, but, whether it does or doesn’t, state insurance mandates don’t seem to violate state constitutions. State individual insurance mandates don’t seem to have sent states like Massachusetts hurling rapidly down a path to Stalinist tyranny.

The CO-OP program would provide billions of dollars in loans that private, member-owned organizations with no — absolutely no!!! — health insurance company ownership or health insurance company oversight could use to set up new, nonprofit health insurers.

Disclaimers:

  • At least some of the CO-OPs formed might work very well, in practice.
  • The people starting the CO-OPs seem to be great people.
  • I’ll probably write CO-OP stories in the future. When I write stories about them, I’ll try to suspend judgment.
  • I’m just a reporter. What do I know?

But, just looking at this as a reporter, it seems as if many, if not most, of the health insurers in the United States are nonprofit companies of one form or another. Many insurers are nonprofit organizations, member-owned mutual insurers, or insurers officially chartered as nonprofit cooperatives.

Some of those nonprofit and/or member-owned insurers seem to be fine insurers, but, seriously: health insurance is not that much better or cheaper in Washington state or Wisconsin, the current hotbeds of cooperative activity, than in other states, and plenty of state consumer groups hate the nonprofit Blue Cross and Blue Shield companies in their states as much as national consumer groups hate WellPoint.

The CO-OP program rules seem to be designed to shut people who know how to run a health insurance company out of the CO-OP program.

And it seems as if the CO-OP program could be hard on existing, struggling nonprofit health insurers that are already trying to be responsible, low-cost organizations without the benefit of tens of millions of dollars in federal aid.

On the third hand: Maybe I’m missing something. Maybe the reality is that the CO-OP starters are so great and the competitors so horrible that the CO-OP starters will end up helping the health care market a lot. But it does seem strange that readers who scream bloody murder when Congress tries to legislate something that would seem pretty tame if a mandate weren’t involved but stays quiet about the government spending billions to finance another crop of health plans that might not be all that much different from existing health plans.

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