Confusion reigns about public option, health cooperatives

Reports that President Obama could accept a reform plan without a government-run public option have triggered a barrage of comments from administration officials and congressional leaders insisting that the public option remains on the table, as well as discussion of how health insurance cooperatives would work. Here's a selection of the news coverage:

CQ Politics: On Sunday, Kathleen Sebelius, the health secretary, said the public option was "not essential," emphasizing President Obama's comment at a Saturday town hall that the public option is "just one sliver" of reform. But, "White House officials said Monday the remarks… were being taken out of context and misunderstood. 'Nothing has changed,' said… a spokeswoman for the White House Office of Health Reform" (Norman, 8/18).

Roll Call: "Speaker Nancy Pelosi (D-Calif.) released a statement reaffirming her support for the public insurance option as a part of comprehensive health care reform. Sen. Russ Feingold (D-Wis.) and Rep. Anthony Weiner (D-N.Y.) made similar remarks" Pelosi wrote in a statement: "There is strong support in the House for a public option. In the House, all three of our bills contain a public option, as does the bill from the Senate [Health, Education, Labor and Pensions] Committee. A public option is the best option to lower costs, improve the quality of health care, ensure choice and expand coverage" (Drucker, 8/17). 

The Des Moines Register: "U.S. Sen. Charles Grassley, [R-Iowa, an opponent of the public option,] said Monday that he was unsure what to make of suggestions that President Barack Obama would drop proposals for a new government-run insurance plan." Grassley said he suggested that Obama drop the public plan earlier this month in order to achieve a bipartisan overhaul (Leys, 8/18).

The Washington Post: "As prospects fade for a public, or government-run, option as part of health-care reform, key senators are considering another model to create competition for private insurers: member-owned, nonprofit health cooperatives." So far, however, the co-ops are defined by only one detail. "They would not be run by the government." As start-up companies without federal clout to set prices and share administrative resources, the co-ops may struggle to compete with insurers that already have deep penetration in a given market (Hilzenrath and MacGillis, 8/18).

The New York Times: "The White House has indicated that it could accept a nonprofit health care cooperative... But the co-op idea is so ill defined that no one knows exactly what it would look like or how effectively it would compete with commercial insurers.... The history of health insurance in the United States is full of largely unsuccessful efforts to introduce new models of insurance that would lower costs" (Pear and Harris, 8/17). 

The Associated Press' FAQ list, based on interviews with leading co-op experts and proponents, says the history of health co-ops in the U.S. is "uneven," and that it is "unclear" whether they would drive private insurers out of business or compete with them. "Many [co-ops] have failed over the decades because they were unable to compete effectively or because tensions between doctors and consumer-oriented governing boards could not be resolved." Some, such as one in Washington state, have succeeded (Babington, 8/17). 

NPR: Pam MacEwan, an executive at Washington state's Group Health Cooperative, explains how these things work: "We are a nonprofit organization, and we're cooperatively governed. The members, that is, the patients, actually elect the board of trustees, and each of our trustees receives care here." However, she was uncertain whether co-ops would be a replacement for the public option given the current paucity of detail (Silberner, 8/17).

Related KHN story: Checking In With Group Health Cooperative's Pam MacEwan