Posts Tagged medical insurance
Posted by in Health Care on August 19, 2009
Finally the idea of not for profit health care cooperatives or co-ops are being discussed in Washington. Once popular during the depression, Co-ops are people pooling their own money to either leverage lower premiums for private insurance or self insuring. This is a pro-consumer and pro-free market approach to health care that if implemented correctly could bring quality health care at the lowest cost.
Groups of people, business’, churches, and organizations could form their own co-ops and the members would vote on boards of directors that will be accountable to its members. After administration and overhead costs all proceeds would go to for paying member’s health care.
This should promote a frenzy of competition among the entire health insurance industry because private insurance companies would fight for the dollars of the co-ops and in many cases compete directly with their not-for-profit counterparts. It will promote competition by forcing doctors, hospitals, and pharmaceutical companies to deal with insurance companies that will demand lower costs from them as they compete for members. The motive to deny or reduce coverage to increase profits will be removed and competition will drive the co-ops and private insurance companies to offer maximum benefits at the lowest cost.
The Obama administration is floating the health care co-op idea but they are talking about massive federal spending to get co-ops off the ground. If co-ops are to work they must be free of undue government interference. Congress can and should enact a framework and provide oversight but they must not be allowed to appoint boards or control them.
The health care cooperative idea will face stiff opposition from the left who prefer a public option and from the right who prefer a pure free market approach. These may be the biggest hurtles to overcome, but I believe it is an idea worth pursuing.