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Cooperatives Can Address Health Care Needs if Properly Defined and Adequate Consumer Protections are Established
Date:6/19/2009

WASHINGTON, June 19 /PRNewswire-USNewswire/ -- The health care proposal released yesterday by the Senate Finance Committee includes an option to offer health insurance through cooperatives but leaves many questions about their structure and scope undefined. The National Cooperative Business Association, the only national membership association for co-ops across all industries, supports the use of co-ops to address the U.S.'s health care needs. NCBA seeks to ensure that any proposal strongly complies with long-established cooperative principles and protects consumers.

Paramount to the definition of a cooperative is membership control. Co-ops are both owned and governed by their members. Because the owners and the users of the business -- ordinary citizens -- are the same, the co-op model is inherently in service of members. Its primary mission is to provide quality goods and services rather than to maximize profits for shareholders; savings at co-ops are generally returned to members.

Cooperative members democratically elect board members and participate in a transparent exchange of information with the board. This keeps the cooperative focused on member services, and gives members the greatest say in how their co-op operates.

Although cooperatives are traditionally funded by member equity, any national health insurance cooperative will need a strong government investment, said NCBA president and chief executive officer Paul Hazen. "Inadequate funds for the co-op's development will leave it financially vulnerable. As history has shown, government-assisted co-ops have been able to fully pay back the government."

Co-ops play a vital role in the U.S. economy. Recent research led by the University of Wisconsin, and funded by the Department of Agriculture, found that the U.S. is home to some 29,000 co-ops. These businesses hold $3.1 trillion in assets, and create two million jobs, $652
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SOURCE National Cooperative Business Association
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