Health Care Co-Ops Explained

In the debate over possible changes to the nation's health care system, health co-ops — basically, nonprofit insurers run by people who have that insurance — have been on the back burner. But the concept is gaining some traction.

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ROBERT SIEGEL, host:

And for more on health co-ops, we turn now to NPR's Joanne Silberner, who has been reporting on them. Joanne, Senator Conrad says co-ops would be better than a public option. Are they actually more efficient or is it simply that they aren't run by the government and therefore can attract votes in the Senate?

JOANNE SILBERNER: Well, the second part's definitely true, it not being run by the government will attract more votes. As for the efficiency part of that question, that really remains to be seen. I mean, we've got two big ones that would serve as models: Group Health in Seattle and Health Partners in Minneapolis. Both of them are in about the mid price range in terms of cost. They're both in very tough markets where health care is very efficient in northwestern U.S. and in the Minnesota areas.

So they're doing well in very efficient markets. It's reasonable to believe that others could do well. But these are old established and have a lot of experience. How it would work out, you know, as they get bigger and they get more of them. I can believe that people will feel that buy-in that Senator Conrad talks about, but I'd want to see the numbers.

SIEGEL: He drew a distinction between the nonprofit Blues in the state of North Dakota, at least they're nonprofit, not everywhere, and a co-op. How does a co-op work? What's different about a co-op?

SILBERNER: Well, what's different is the members vote for the board of directors. In the Blues, they tend to be appointed. They're from the community, but they're appointed. In the co-ops members can run. It's an election. People who have insurance get to vote. You know, you yourself could run and you could find yourself on the board. And the board sets policy. The board hires the CEO and they can get rid of the CEO if they don't like the way the company is going.

SIEGEL: What do you hear and what do you think of Senator Conrad's estimate? He cites actuaries for coming up with a number about $6 billion, he says, the cost of getting co-ops up and running all over the country.

SILBERNER: Well, if that's what he wants, that's what would be needed in reserves. That's what the companies would have to have to get started. There's an awful lot involved in starting a health insurance plan. You've got to build a health IT system. Now, there's going to be some help from the government on that. But you've got to build a computer billing system. You've got to line up doctors and hospitals willing to provide services. You're competing with other health insurers. And you've got to convince these doctors and hospitals to take the fees that you're willing to pay.

SIEGEL: And your sense is, on Capitol Hill, the idea of a network of health co-ops, a lot more popular than a government insurance company?

SILBERNER: Hard to tell. In the Senate it may prove that way. I think the House is going to be a different situation. In the House you've got a lot of people who really do want to see that government plan.

SIEGEL: And who are disappointed at the news that perhaps the Obama administration's willing to back off?

SILBERNER: Yes.

SIEGEL: NPR's Joanne Silberner. Thanks a lot, Joanne.

SILBERNER: Thank you.

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