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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
Date:8/18/2009

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: www.ConsumerWatchdog.org/resources/Co-Op_Factsheet.pdf.

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 provide
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SOURCE Consumer Watchdog
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