Sen. Conrad On Health Care Co-Ops The proposal of a government-funded insurance plan — otherwise known as a public option — is losing traction. A likely alternative to that plan is a network of nonprofit health co-ops. Democratic Sen. Kent Conrad of North Dakota, who favors these co-ops, says co-ops would provide a nonprofit competitor to for-profit insurance companies.
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Sen. Conrad On Health Care Co-Ops

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Sen. Conrad On Health Care Co-Ops

Sen. Conrad On Health Care Co-Ops

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Well, now to health care and the indication is that the Obama administration is willing to part with the idea of a public option that would be a government-funded insurer to compete with private companies. The likely alternative would be a network of nonprofit health co-ops. Senator Kent Conrad of North Dakota is a leading proponent of that idea. I spoke with him earlier as he traveled between events in his home state. Senator Conrad has said that 12 million people might instantly be insured by co-ops. And I asked him: What's so much better about co-ops than a government-owned insurance company?

Senator KENT CONRAD (Democrat, North Dakota): Well, it has the prospect of getting bipartisan support, number one. Without bipartisan support it's very hard to see any alternative advancing. The strength of a cooperative plan is that it would provide a nonprofit competitor to for-profit insurance companies in a proven business model. That is, co-operatives that have been around and very successful across many different business lines for more than 90 years.

So these are models that have been tested, that have been tried, but they're not government run, government controlled. They're membership run and membership controlled.

SIEGEL: In your own state, Blue Cross and Blue Shield of North Dakota converted in 1998 to a not-for-profit mutual insurance company. Does that mean that North Dakota would not need a co-op non profit insurer? And if not, why has Blue Cross, Blue Shield not solved all the problems in your state?

Sen. CONRAD: My state, like in many states, there is very little competition. There's one dominant carrier, and if you believe in competition and I do, the notion of having another health insurer that would be competing, that would be not-for-profit is attractive.

SIEGEL: To clarify, though, the one company that is dominant is a nonprofit.

Sen. CONRAD: It does not function as a cooperative functions. Cooperative functions with a membership actively engaged in the management. Group Health, which is out in Washington state, which is - runs as a co-op - find that they have a real commitment to the success of the organization. It's very different than a top-down model of some other insurers and certainly very different than for-profit insurance companies.

SIEGEL: How much would it cost to get a network of nonprofit co-ops up and running all around the country?

Sen. CONRAD: We've gone to the best actuaries in the country and they've independently come back with the same answer. They have said about $6 billion to have the insurance reserve requirements met. They've also told us, because we're going to have a reformed insurance market, that will make these cooperative plans even more competitive than they would be in the existing market.

SIEGEL: I want to ask you about a couple of things that Senator Jay Rockefeller, West Virginia, a Democrat who supports a public option as opposed to co-ops, said on this program a couple of weeks ago. Number one, yeah, there's a very successful co-op in Washington state, but we're talking about a phenomenon that's really common to the Pacific Northwest and upper Midwest. And there's not much history of co-ops anywhere else in the country. This would be a rather bold thing to try to create 51 such co-ops in a couple of years.

Sen. CONRAD: It's just factually wrong. There are large cooperatives all across this country. Land O'Lakes is a $12 billion club functioning all across America. There are rural electric co-ops in 47 states. Ace Hardware is a cooperative.

SIEGEL: But he was talking about health - he was talking about health cooperatives - of insurance company cooperatives.

Sen. CONRAD: And what the actuaries say is this: there have been very few new entrance of any model in the current market because it's an unreformed market. And because you don't have the 40 million new entrants that might come with health insurance reform. When you put those together, the proven effectiveness of a cooperative model - what these actuaries are telling us is it would be the third largest insurer in the country - and that would provide meaningful competition.

SIEGEL: Here's something else that Senator Rockefeller said. He said, this pursuit of bipartisanship in the Senate is all about maximum one or two Republican votes. You're not going to get the votes of any other Republicans if it's called health care reform. And therefore, the tactical benefit of doing something to appeal to Republican senators just isn't worth the payoff.

Sen. CONRAD: Well, again, I just disagree on the vote count. The hard reality is there are not the votes in the United States Senate's Republic option -never has been.

SIEGEL: Senator Conrad, thank you very much for talking with us today.

Sen. CONRAD: You got it.

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