Sen. Kent Conrad is aware that there is no appetite among Republicans and many Democrats for a public-option plan. So he is pushing a “co-op.” What is it? Well it is a federally chartered entity that will offer insurance plans to compete with the private insurance market. Hmmm. Doesn’t this sound just like . . . Well, yes. Keith Hennessy explains:
A two-tiered structure, in which nonprofit health plans have a market advantage over for-profit plans, would be hugely disruptive. Individuals and employers would have a tremendous incentive to dump their current health plan in favor of a new one chartered by this new entity. To the extent that employers made this choice on behalf of their employees, it would conflict further with the President’s commitment that you can keep the plan you have now.
I fear that, like the public option, the Conrad option would crowd out private health insurance. Government would provide low-cost capital. Government would impose rules to suit the Congressional or Executive Branch whims of the moment. The ability to bypass state insurance commissioners would mean these new nonprofit plans, regulated by the new entity, would crowd out the existing market of private plans.
And liberal fans of government-run health care have figured it out, too: “If Congress passed a bill that was national, injected significant startup funds, and guaranteed the lowest possible rates, the result would come pretty darn close to a public option.”
Conrad may be working in good faith for a magic fix. But Republicans and many moderate and conservative Democrats are unlikely to go for his plan so long as it bears an uncanny resemblance to the public option. Crowding out private insurance plans and putting the government in the driver’s seat to regulate insurance (and ultimately, treatment) is not acceptable to a great number of Congress members — no matter what you call it.