In looking for better ways to establish affordable healthcare for all American citizens, discussions are taking place about the development of health insurance co-ops. In these days it is becoming a hot topic in the country. In terms of healthcare reform, health insurance co-ops, which would be developed by groups as small scale businesses, could be an option for those who need health insurance. For the people those who do not like the idea of the public insurance option, it may be the good alternative.
According to a Harvard Medical School study, 45,000 Americans die due to lack of health insurance every year because they cannot get adequate care. This number is the equivalent in number of deaths to a little more than one 9/11 disaster per month, year in, year out.
Non-profit health insurance cooperative could be third alternative to the traditional private health insurance and newly proposed public health insurance. Cooperative is the good idea to provide around 47 million uninsured and struggling Americans with an alternative to the private health insurance. The co-op proposal come in large part due to some challenges in generating widespread public and political support for a public health insurance option.
· Health insurance cooperatives are non-profit organizations, and are neither run by government nor by companies.
· They have some of the strengths of public option in that they are able to give competition for the insurance companies. Moreover, it meets some of the objections from others who do not want a government-run plan, as they are membership-run and membership-controlled, not government-controlled.
· They represent thousands of members, so they have better negotiating power with providers, keeping costs lower than individual insurance company. Additional savings come from the absence of profit pursuit and their non-taxable status.
· Co-ops are driven by health interests of members, and is not beholden to shareholders.
· As non-profit enterprises, they would not have to worry about generating returns for shareholders. They could use that freedom to reduce members’ premiums or put more money into improving care. Their primary allegiance and accountability are to that membership base and customer base.
· Having low administrative costs, their big focus is on putting the dollars into health care and not into administration. Being owned by members could make them more accountable to consumers.
Usually medicine has been a mix of state, non-profit, and for-profit actors and it’s worth broadening the mix of insurance options available to ordinary people. But, co-ops are a part of healthy non-profit, private, public health care mix. They accomplish same goal as public plan, and competes with insurers. One thing we need in the system is more competition. In the sense, they are a good idea as they give competition to for-profit insurance companies.
Health insurance cooperatives can generate an independent stream of revenues. This compares favorable against a government-run public insurance option, which is dependent on taxpayer funding and the whims of government budget allocations. In this sense, co-ops offer a good competitive alternative to private health insurance companies.
Co-ops can scale in a decentralized and community-focused manner. The model can work very well in filling the gaps left by the private insurance industry. And, in this sense, co-ops can compete well on a local level. Most important thing is that co-ops are more community-focused than large insurance companies.
In co-ops people like the small community feel. It provides more personal attention. Large insurance companies and bureaucracies lose their community feel very easily. In that scale at local level co-ops can compete more effectively with the idea that they are more community-oriented and it is very easy to deal with them.
Co-ops implement a more holistic, preventive approach. System emphasizes primary care medicine and preventive care which is a major contributor, especially in the time of skyrocketing health costs.
Co-ops are more political feasible than public insurance. The public plan is too contentious to pass. While it has significant support, it also has extremely fervent opposition. Passing it would create a near revolutionary-level of outrage. Avoiding this is important, and adapting a co-op model is a good means of doing this.
In co-ops members would feel in control. There is a sense of transparency. They are cooperatively governed. Members are eligible to vote in the organization, and they have a say in how to organize care and design benefits. Members could participate in reviews of grievances and in discussion about the benefits packages. Most of the work is done by the board of trustees that has elected by members.
Cooperatives can deliver high-quality care, and could do a better job of controlling costs than some of the inflationary models. Co-op model could be a manageable and efficient system, when the question of the cost of medical care arises. It could be a good compromise.