What Is a Health Care Co-Op, Anyway?

Member-owned plans would lack government leverage
By Matt Cantor,  Newser User
Posted Aug 18, 2009 9:37 AM CDT

(Newser) – The likelihood of there being a public health care option is fading—which has some in Congress pushing for an alternative: nonprofit health cooperatives, the Washington Post reports. Few details have emerged about how such plans would work; as it stands, their defining feature seems to be that they wouldn’t be government-run. While that might appeal to conservatives, it could also make it tough for the programs to survive, experts say.

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Unlike the public option, member-owned cooperatives wouldn’t offer federally-mandated reimbursement rates for health care providers—a key savings aspect of the public plan. Others say the co-ops may struggle to gain the critical mass—estimated at 500,000 members—necessary to negotiate competitive rates with providers; the country's largest rural co-op currently has 186,000. But proponents say co-ops would act as insurers, negotiating directly with health care providers, and liken them to mutual life insurance companies, which are owned by policyholders and therefore somewhat immune to the pressures of Wall Street. (Read more health care reform stories.)

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