The New York Times today does a nice job pointing out some of the limitations of the co-op coverage model being pushed by Gang of Six member Sen. Kent Conrad
“„The government would offer start-up money, perhaps $6 billion, in loans and grants to help doctors, hospitals, businesses and other groups form nonprofit cooperative networks to provide health care and coverage.
“„Larry J. Zanoni, executive director of the Wisconsin plan, said: “We are a testament to the success of a health care cooperative. But it took us over 30 years to get where we are today.”
“„Mr. Conrad’s own state demonstrates the uncertainties surrounding cooperatives. Blue Cross Blue Shield of North Dakota dominates the state’s private insurance market, collecting nearly 90 percent of premiums. As a nonprofit owned by its members, the company would hope to qualify as a co-op under federal legislation, said Paul von Ebers, its incoming president and chief executive. [...]
“„Any new insurer in North Dakota would probably try to take members from the local Blue Cross plan, but that would not be easy to do.
“„Representative Earl Pomeroy, Democrat of North Dakota, said the proposal for cooperatives was “a very worthy idea.”
“„“The market here is uncompetitive,” said Mr. Pomeroy, a former state insurance commissioner. “A cooperative could provide an alternative source of insurance and some interesting competition for premium dollars. A co-op could operate at lower costs, in part because it would not need to pay its executives so generously as the local Blue Cross Blue Shield plan.”