Navigation Links
Sen. Conrad's Health Insurance Co-Ops Won't Provide Affordable Care and Could be Used by the Insurance Industry Against Americans, Says Consumer Watchdog

SANTA MONICA, Calif., Aug. 18 /PRNewswire-USNewswire/ -- The health insurance purchasing co-ops proposed by Sen. Kent Conrad (D-ND) and a number of Senate conservatives have been tested and largely failed throughout the United States. History shows they would not have the market clout to leverage discounts and good policy choices with health insurers. Such co-ops could even become a path to gutting state consumer protection laws, according to the non-partisan Consumer Watchdog.

Download Consumer Watchdog's fact sheet on health insurance co-ops here:

Co-ops have largely failed to provide health care savings for small businesses and the self-employed because they could not amass enough purchasing power to leverage better prices from the health insurance industry.(1) Health insurers, hostile to co-ops, have been free to ignore them and refuse to sell coverage.(2) Insurers' hostility and neglect also prevented co-ops from offering a sufficient variety of plans with good benefits to attract a large enough group of members.

As described by Sen. Kent Conrad, the chief proponent of co-ops, state-based or regional co-op health plans would remain beholden to for-profit insurance companies for provision of coverage. Conversely, the proposed "public option" would allow business and individuals and small businesses to bypass the private insurance market altogether, if they chose, and avoid wasteful administrative costs and profits that are ten times greater than administrative costs of public health plans like Medicare.(3)

According to proponents, a health co-op would need 25,000 members to be financially viable, and at least 500,000 members to negotiate effectively with health care providers.(4) A 2002 report by the Commonwealth Fund described various reasons for the failure of previous co-op experiments, all related to lack of clout:(5)

  • The Florida Community Health Purchasing Alliances enrolled 92,000 people when enrollment peaked in 1998, had increasing difficulty attracting any but the smallest employers and gradually found themselves losing health insurers. As a consequence, enrollment also fell, and the purchasing alliance ceased operations in 2000.
  • The Texas Insurance Purchasing Alliance, begun in 1994, never reached the enrollment levels of the Florida effort, covering only about 1,000 firms and 13,000 people at its height. Difficulty in attracting employers led to the withdrawal of insurers, and the Alliance governing board ultimately decided that the operation was not viable and closed it down.
  • The Alliance in Colorado was the most recent failure. Established in 1995, the Alliance closed in the summer of 2002 after one of its three health plans withdrew from the state small-group market, a second capped enrollment, and the last decided to stop participating.

A Government Accountability Office report in 2000 came to similar conclusions.(6)

Wolf in Sheep's Clothing: Eliminating State Insurance Regulation

Some lawmakers, led by Senator Mike Enzi (R-Wyo.), see co-ops as not just a weak pseudo-reform but as the insurance companies' top prize: a vehicle to avoid state insurance regulation.

Under a similar plan authored by Enzi in 2006, state co-ops would have been exempted from state consumer protection laws. As a result, consumers would lose benefits such as a woman's right to visit an OB/GYN, screenings for cervical and prostate cancers, newborn care, bans on "drive thru" deliveries, and guarantees of independent medical review if an insurer denies coverage for a medically necessary treatment. The plan would have also extended the Employee Retirement Income Security Act (ERISA) exemption from state common law to any company that sells these bare bones plans. If health insurers inappropriately denied claims, policyholders would be unable to collect damages. Enzi's measure, S. 1995--the so-called "Association Health Plan" legislation--failed in the Senate in 2006, but Enzi continues to show strong interest in reviving it.

Enzi's bill (S.1955), like Conrad's co-ops, was touted as a way to insure more people but would in fact have eroded existing coverage for those who already had health insurance. Under it, any HMO or insurer could ignore state patient protections, courts and regulators to sell "junk" health insurance.

Shifting the Burden to the Middle Class

All of the bills being considered in Congress require Americans to buy private insurance policies. The fragmented co-ops, with a few possible large-state exceptions like California, would not be capable of protecting their customers from the worst insurance company abuses, including double-digit premium increases and other steady cost-shifting onto the middle class. Any effort by states to band together in regional alliances would raise a demand by insurers to be exempted from any state patient protections or controls.

Only a national public option would have the clout to bargain with providers and bypass the insurance companies altogether.

(1) See Elliot K. Wicks, Health Insurance Purchasing Cooperatives, Issue Brief, The Commonwealth Fund, November 2002, page 3-4.

(2) Id.

(3) Jacob S. Hacker, Ph.D., Case for Public Plan Choice in National Health Reform, Institute for America's Future & U.C. Berkeley School of Law, December 2008, page 5.

(4) Robert Pear and Gardiner Harris, Alternate Plan as Health Option Muddies Debate, New York Times, August 17, 2009.

(5) Supra, note 1, page 3.

(6) Cooperatives Offer Small Employers Plan Choice and Market Prices, Government Accountability Office, March 2000. Available at:

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at

SOURCE Consumer Watchdog
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Women Speak Out Against Government Takeover of Health Care
2. Brooks Opens New Center for Back & Neck Health
3. Surgical Care Affiliates and Hawaii Pacific Health Partners, Inc. Complete Joint Venture
4. EwingCole, RDLA Join Together, Creating Architecture/Engineering Firm With Largest Healthcare Focus in the Delaware Valley
5. and Launch Co-Branded Pet Travel and Pet Health Resources
6. Healthy Advice Networks Is Recognized With National Health Information Awards for Sixth Consecutive Year
7. Arcadia Resources to Attend Barrington Research Healthcare Conference
8. HealthFitness Named Lead Integrator for MillerCoors Health Improvement Program
9. 7 Easy Tips for Healthy Aging
10. Availity Teams with Blue Cross and Blue Shield of Minnesota to Improve Health Care Efficiencies
11. Union HealthShare Signs Multi-Year, Multi-Million Dollar Agreement with North Star Health
Post Your Comments:
(Date:11/24/2015)... ... November 24, 2015 , ... Dr. Todd S. Afferica, a noted general ... of his patients. Dr. Afferica now uses the BIOLASE WaterLase iPlus 2.0™ in many ... the doctor uses other traditional cutting tools, such as the scalpel and high-speed drill, ...
(Date:11/24/2015)... ... November 24, 2015 , ... In an article published November 12th ... which patients are or are not eligible for bariatric surgery. The article explains that ... are more than 100 pounds overweight, or have a BMI of 35 and over ...
(Date:11/24/2015)... ... 2015 , ... It takes only three to five seconds to make a ... first impression be positive and reflects business values. If a client starts with a ... to return. They will also share their thoughts about a business with others, which ...
(Date:11/24/2015)... ... 2015 , ... Cancer patients, survivors, caregivers, family members and ... taping of the next CURE Connections® video series on Saturday, Dec. ... at Georgetown University Hotel & Conference Center in Washington, D.C. , CURE Connections, ...
(Date:11/24/2015)... Danbury, CT (PRWEB) , ... November 24, 2015 , ... ... Network (WCHN) today announced an innovative study designed to yield insights into how to ... potential development of biomarkers for pancreatic cancer from small, non-coding RNA molecules (ncRNA), genetic ...
Breaking Medicine News(10 mins):
(Date:11/24/2015)... DELHI , November 25, 2015 ... invoked due to repeated failure of IVF cycles. After ... Bhatia was totally dejected and had lost all hopes that she would be ... first Indian miracle child conceived after failure of over ... to abroad (UK) before they decided to take one last attempt ...
(Date:11/24/2015)...  In the pharmaceutical industry, companies want to rapidly ... uncover new insights, tactics and strategies that will improve ... --> However, organizations often find it is difficult ... that all rules and regulations are met to ensure ... to efficiently launching market research projects is the conflicting ...
(Date:11/24/2015)... , November 24, 2015 --> ... report "Spine Biologics Market by Product Type (Bone Graft, Bine ... Discectomy and Fusion, Posterior Lumbar Interbody Fusion), End User, and ... global market was valued at $1.90 Billion in 2014 and ... CAGR of 4.4% during the forecast period of 2015 to ...
Breaking Medicine Technology: