contact
Main
Contact Me

about
About RightWing NutHouse

Site Stats

blog radio

Listen to internet radio with RINO Hour of Power on Blog Talk Radio
Click Here to Pay Learn More

testimonials

"Brilliant"
(Romeo St. Martin of Politics Watch-Canada)

"The epitome of a blogging orgasm"
(Cao of Cao's Blog)

"Rick Moran is one of the finest essayists in the blogosphere. ‘Nuff said. "
(Dave Schuler of The Glittering Eye)

archives
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004

search



blogroll

A CERTAIN SLANT OF LIGHT
A Conservative Lesbian
ABBAGAV
ACE OF SPADES
ALPHA PATRIOT
AM I A PUNDIT NOW
AMERICAN FUTURE
AMERICAN THINKER
ANCHORESS
AND RIGHTLY SO
ANDREW OLMSTED
ANKLEBITING PUNDITS
AREOPAGITICA
ATLAS SHRUGS
BACKCOUNTRY CONSERVATIVE
BASIL’S BLOG
BEAUTIFUL ATROCITIES
BELGRAVIA DISPATCH
BELMONT CLUB
BETSY’S PAGE
Blacksmiths of Lebanon
Blogs of War
BLUEY BLOG
BRAINSTERS BLOG
BUZZ MACHINE
CANINE PUNDIT
CAO’S BLOG
CAPTAINS QUARTERS
CATHOUSE CHAT
CHRENKOFF
CINDY SHEEHAN WATCH
Classical Values
Cold Fury
COMPOSITE DRAWLINGS
CONSERVATHINK
CONSERVATIVE THINK
CONTENTIONS
DAVE’S NOT HERE
DEANS WORLD
DICK McMICHAEL
Diggers Realm
DR. SANITY
E-CLAIRE
EJECT! EJECT! EJECT!
ELECTRIC VENOM
ERIC’S GRUMBLES BEFORE THE GRAVE
ESOTERICALLY.NET
FAUSTA’S BLOG
FLIGHT PUNDIT
FOURTH RAIL
FRED FRY INTERNATIONAL
GALLEY SLAVES
GATES OF VIENNA
HEALING IRAQ
http://blogcritics.org/
HUGH HEWITT
IMAO
INDEPUNDIT
INSTAPUNDIT
IOWAHAWK
IRAQ THE MODEL
JACKSON’S JUNCTION
JO’S CAFE
JOUST THE FACTS
KING OF FOOLS
LASHAWN BARBER’S CORNER
LASSOO OF TRUTH
LIBERTARIAN LEANINGS
LITTLE GREEN FOOTBALLS
LITTLE MISS ATTILA
LIVE BREATHE AND DIE
LUCIANNE.COM
MAGGIE’S FARM
MEMENTO MORON
MESOPOTAMIAN
MICHELLE MALKIN
MIDWEST PROGNOSTICATOR
MODERATELY THINKING
MOTOWN BLOG
MY VAST RIGHT WING CONSPIRACY
mypetjawa
NaderNow
Neocon News
NEW SISYPHUS
NEW WORLD MAN
North Star National
Northerncrown
OUTSIDE THE BELTWAY
PATRIOTIC MOM
PATTERICO’S PONTIFICATIONS
POLIPUNDIT
Political Byline
POLITICAL MUSINGS
POLITICAL TEEN
POWERLINE
PRO CYNIC
PUBLIUS FORUM
QUESTIONS AND OBSERVATIONS
RACE42008
RADICAL CENTRIST
Ravenwood’s Universe
RELEASE THE HOUNDS
RIGHT FROM LEFT
RIGHT VOICES
RIGHT WING NEWS
RIGHTFAITH
RIGHTWINGSPARKLE
ROGER L. SIMON
SHRINKRAPPED
Six Meat Buffet
Slowplay.com
SOCAL PUNDIT
SOCRATIC RYTHM METHOD
STOUT REPUBLICAN
TERRORISM UNVEILED
TFS MAGNUM
THE ART OF THE BLOG
THE BELMONT CLUB
The Conservative Cat
THE DONEGAL EXPRESS
THE LIBERAL WRONG-WING
THE LLAMA BUTCHERS
THE MAD PIGEON
THE MODERATE VOICE
THE PATRIETTE
THE POLITBURO DIKTAT
THE PRYHILLS
THE RED AMERICA
THE RESPLENDENT MANGO
THE RICK MORAN SHOW
THE SMARTER COP
THE SOAPBOX
THE STRATA-SPHERE
THE STRONG CONSERVATIVE
THE SUNNYE SIDE
THE VIVID AIR
THOUGHTS ONLINE
TIM BLAIR
TRANSATLANTIC INTELLIGENCER
TRANSTERRESTRIAL MUSINGS
TYGRRRR EXPRESS
VARIFRANK
VIKING PUNDIT
VINCE AUT MORIRE
VODKAPUNDIT
WALLO WORLD
WIDE AWAKES
WIZBANG
WUZZADEM
ZERO POINT BLOG


recentposts


RINO Hour of Power: Baltimore Riots: Are we in for a long, hot summer?

RINO Hour of Power: Is the GOP doing a better job of running Congress than the Democrats?

RINO Hour of Power: Hillary Announces: Should we bother to count the votes?

RINO Hour of Power: A Preview of the 2015 Major League Baseball Season

RINO Hour of Power: Indiana religious freedom law: Bigotry or defending the 1st Amendment?

RINO Hour of Power: A Conversation with David P. Goldman, AKA ‘Spengler’

RINO Hour of Power: Eight Year Anniversary of Broadcasting on Blog Talk Radio

RINO Hour of Power: Political Potpourrie

RINO Hour of Power: Mr. Netanyahu Goes to Washington

Boycott CPAC

RINO Hour of Power: GOP playing chicken with Homeland Security funding

RINO Hour of Power: What does the Brian Williams fiasco tell us about modern journalism?

RINO Hour of Power: The Vaccine Controversy and the Anti-Science Right

RINO Hour of Power: The State of the Union - The State of Obama’s Presidency

RINO Hour of Power: A Tour d’Horizon of Global Terrorism

RINO Hour of Power: How will Republican factionalism in the House affect Congress?

RINO Hour of Power: The Opening to Cuba

RINO Hour of Power: The Death of The New Republic

RINO Hour of Power: Political Potpourri

Ten Reasons Why Thanksgiving is My Favorite Holiday

RINO Hour of Power: The Fallout from Ferguson

RINO Hour of Power: Gruber Fallout and the Lame Duck Session of Congress

RINO Hour of Power: Election Night Extravaganza

RINO Hour of Power: GOP eyes Senate majority status one week from mid terms

RINO Hour of Power: War Drums Beating in Washington


categories

"24" (117)
ABLE DANGER (10)
American Issues Project (11)
Arizona Massacre (5)
Bailout (32)
Bird Flu (5)
Birthers (16)
Blackhawks (2)
Blagojevich (9)
Blogging (404)
Books (10)
CARNIVAL OF THE CLUELESS (68)
Caucasus (1)
CHICAGO BEARS (40)
Chicago Bulls (3)
Chicago East (3)
CIA VS. THE WHITE HOUSE (29)
Cindy Sheehan (13)
Climate Change (3)
Climate Chnage (11)
conservative reform (96)
cotton candy conservatives (20)
CPAC Conference (13)
Culture (11)
Debt ceiling (2)
Decision '08 (402)
Decision 2010 (13)
Decision 2012 (34)
Deficit reduction (5)
Election '06 (9)
Entitlement Crisis (4)
Environment (15)
Ethics (290)
Fairness Doctrine (1)
Financial Crisis (53)
FRED! (28)
FrontPage.Com (79)
Frum Forum (2)
Gaza incident (1)
General (431)
GOP Reform (61)
Government (295)
health care reform (66)
History (298)
Homeland Security (18)
IMMIGRATION REFORM (28)
IMPEACHMENT (3)
Iran (114)
IRAQI RECONCILIATION (13)
Israel vs. Hamas (6)
KATRINA (29)
Katrina Timeline (5)
Lebanon (18)
Liberal Congress (12)
Manzine (1)
Marvin Moonbat (14)
Media (262)
Middle East (183)
Moonbats (81)
National Health Insurance (4)
NET NEUTRALITY (2)
Newsreal Blog (1)
Obama inauguration (2)
Obama-Rezko (15)
OBAMANIA! (80)
Oil Spill (2)
Olympics (6)
Open House (1)
Palin (23)
Pirates (1)
PJ Media (119)
PJ Tatler (5)
Politics (1271)
Presidential Debates (7)
Presidential Transition (9)
RINO Hour of Power (140)
RNC (2)
S-CHIP (3)
Sarah Palin (5)
Science (70)
Space (33)
Sports (18)
Star Trek (1)
SUPER BOWL (7)
Supreme Court (28)
Swine Flu (4)
Tea Parties (15)
Technology (5)
Tenth Amendment (3)
The Caucasus (1)
The Law (19)
The Long War (11)
The Rick Moran Show (306)
Too Big To Fail (8)
Torture (2)
UNITED NATIONS (22)
Walpin Scandal (2)
War on Terror (402)
WATCHER'S COUNCIL (117)
WHITE SOX (7)
Who is Mr. Hsu? (7)
Wide Awakes Radio (9)
WORLD CUP (11)
WORLD POLITICS (127)
WORLD SERIES (16)


meta

Admin Login
Register
Valid XHTML
XFN







credits


Design by:


Hosted by:


Powered by:
8/18/2009
CO-OPS NOT THE ANSWER

In researching my latest AIP article on health care co-ops, I must confess that I wanted to like the idea. I didn’t know much about them but what I had heard was pretty good.

Here’s a reasonable analysis from the Heritage Foundation that finds some things to like but much more to fault with regard to health insurance cooperatives.

For myself, I am a firm believer in the concept of “simple is best.” All things being equal, whether it is in my personal life, or a government program, the less complex the idea, the better chance it has of working. This may sound stupidly simple but if you look at the way many people live their lives, they could benefit greatly by following that advice. Too often, we unnecessarily complicate our lives by overthinking, or overdoing.

With government, it is simply a matter of scale. Trying to serve 300 million people is, by definition, an enormously complex undertaking. So it would be with co-ops.

The plan is so nebulous at the moment that no one is really sure how co-ops would work in practice. Ideally, you would have 50 separate co-ops serving people in the various states. Some smaller states might band together to form regional co-ops to increase their marketing and distribution opportunities. The federal government would provide $3-4 billion in seed money to get the co-ops off the ground (perhaps more) and an administrative infrastructure for each co-op would either be set up by the state or contracted out.

Participants (”shareholders”) would sign up and purchase insurance through these pools. Policies would not be underwritten by private companies but by the co-ops themselves. It is assumed the government would grant generous tax subsidies to businesses and individuals to sign up with the co-ops and make them a going concern. Decisions on what to cover, and reimbursement rates would ideally be made by all the shareholders, but when you are talking about a statewide co-op, that will probably not be possible.

Would it work? Would the co-ops be able to compete with private insurance companies, forcing them to lower premiums while giving shareholders quality care at a reasonable cost?

The answer is almost certainly no. First of all, there is the titanic complexity of setting up so many co-ops in the first place. By definition, they would have different rules, different coverages (although guidelines from the federal government would help there). They would conduct business in 50 different ways.

Coverage would be wildly uneven and quality would also vary. Some - perhaps many - might not make it or be so poorly run that the government would have to take them over (The Washington, D.C. co-op was forced to sell itself to Humana it was so mismanaged.) There were many health care co-ops during the Depression that all ended up failing. And the record of co-ops begun in the last 20 years is very uneven with some succeeding, some failing, and some just limping along.

I think part of the answer is a matter of scale. The successful co-ops in Seattle and Minneapolis are small enough to be well run and large enough to spread the risk out over as many people as possible.

But what happens when you try and graft that model on to a statewide co-op? It won’t take for the simple reason that what is simple at the local level becomes devilishly complicated when you go from insuring 100,000 people to several million. Also, several questions would have to be raised; who elects the directors or would the governor appoint them? How can decisions on what coverages and how much that would be affecting a million or more people be made? Would politics enter into the running of these co-ops?

Co-ops would not adequately address the problem of insuring those with chronic or pre-existing conditions. And forget portability. Nor would they necessarily insure more of the currently uninsured. It’s hard to see how people would see a co-op - which after all, is competing with private insurance carriers - as any more practical or a better deal than anything they are presented with now. Without an individual mandate, there will be millions who simply refuse to buy insurance regardless of how cheap it is or how generous the subsidy.

Heritage’s Edmund F. Haislmaier thinks that there might be a minor role for co-ops in health care reform:

In the case of health insurance markets, there are two areas where the co-op model could conceivably be applied.

The first is with respect to entities that might organize the buying and selling of health insurance, such as employer purchasing groups or state health insurance exchanges. The second is applying the cooperative concept to one or more of the insurers selling coverage in the market.

The idea that businesses could pool themselves and purchase health insurance is an excellent one and is already being tried with liability and other forms of insurance on a micro basis in several industries. This also would be a complex undertaking but much less so than trying to set up statewide co-ops.

In short, the more I read about co-ops the more convinced I became that on a nationwide basis, it would never work to deal with the problems they would be set up to address and may, in many cases, make matters worse. It is possible that eventually, the federal government would be forced to take most of them over anyway.

I don’t necessarily buy the idea that co-ops are a Trojan Horse for a public option but certainly the potential is there for a de facto government takeover. It’s not the only reason to oppose their creation but it should be weighed with the rest of the complex problems that co-ops would create for both government and the consumer.

By: Rick Moran at 10:04 am
7 Responses to “CO-OPS NOT THE ANSWER”
  1. 1
    jackson1234 Said:
    10:25 am 

    Excellent, substantive post here, and one the MSM would do well to expand upon. I am afraid the nebulous aspect is a feature and not a bug, though. The co-op approach appears designed more to save face than to accomplish anything at this juncture.

    I also have to wonder if state insurance commissioners, who tend to be as power mad as any left-wing D.C. pol, would cooperate with their counter-parts in other states…and this assumes that the states still would regulate insurance provided via the co-ops. Or would the co-ops be federally regulated? Would the infrastructure be self-regulating?

    I agree that if private businesses could combine and pool and expand their base of insureds would be a great idea. Would government consent to being cut out of that loop, though? And again, what would be the regulatory structure?

    Again, good job here, and something to chew on.

  2. 2
    Surabaya Stew Said:
    1:04 pm 

    I think part of the answer is a matter of scale. The successful co-ops in Seattle and Minneapolis are small enough to be well run and large enough to spread the risk out over as many people as possible.

    That, and the average resident of the above cities is probably somewhat more liberal and therefore more deposed to the idea of co-ops in the first place. I’ll bet Co-ops would be a runaway success in Berkley and Cambridge, while they would be non-starters in Birmingham and Orange County. Other parts of the midwest with histories of progressive policies (such as Wisconsin), may also find success with co-ops.

    Which raises an interesting idea, could the solution to the health care crisis be for each of the individual states to come up with their own answer under a loose federal mandate? We leave the implementation of so many responsibilities (such as education) up to the state governments, why shouldn’t health care for all be any different?

  3. 3
    Eddie Said:
    1:35 pm 

    “Which raises an interesting idea, could the solution to the health care crisis be for each of the individual states to come up with their own answer under a loose federal mandate? We leave the implementation of so many responsibilities (such as education) up to the state governments, why shouldn’t health care for all be any different?”

    That sounds about right to me.

    Rick,

    I had thought highly of the co-op idea, but with your post and the Heritage link, I have to admit this is not much better than the public option. Thank you for a hysteria-free dose of reality.

  4. 4
    bb Said:
    2:22 pm 

    Lost in the discussion is the fact that many of the demonized private insurance companies (i.e. many of the BCBS carriers, etc.) are currently not-for-profit and are run with the same basic principles outlined above for the co-ops.

    In fact, the BCBS companies almost all grew out of the co-ops of the depression era. They are demonized in the rhetoric of the current reform push, for trying to do the very thing that the reform is hoping to do (i.e. holding down the rising cost of health care). Any government plan (or government supported co-op) would be forced to end up making the same decisions these demonized companies do or it would fail.

    Insurance, by definition, is a co-operative enterprise (whether it is for profit or not).

    I think everyone can agree that some changes could be made to improve the current Health care system. But, demonizing the private carriers, driving them out of business and replacing them with a government run options is not it.

  5. 5
    Chuck Tucson Said:
    3:29 pm 

    bb said:

    But, demonizing the private carriers, driving them out of business and replacing them with a government run options is not it.

    Why not? Driving companies out of business that fail their customers so completely is about as American as you can get.

  6. 6
    bb Said:
    11:54 am 

    Chuck Tucson Said:

    Why not? Driving companies out of business that fail their customers so completely is about as American as you can get.

    Right, the American way is capitalism. The market will fix itself. If a company fails it’s customers, capitalism insures that eventually it will fail. Customers will go elsewhere. Companies fail all the time, the problem starts when the government circumvents that process, mettles in a market and props up bad business (see: Fannie Mae, Freddie Mac, the whole banking industry).

  7. 7
    Eric Said:
    12:04 pm 

    Rick,

    I might have missed it but I wonder if you’ve actually presented any of your own ideas for reforming our health insurance system? It appears that you believe the system is in need of some reform but I’m not certain what form that reform would take.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.