Wednesday, August 5, 2009

Democrats Agree: A Health Insurance Co-Op IS a Government-Run Health Plan

“Fannie Med,” Anyone?


As they attempt to craft a “bipartisan compromise,” Democrats on the Senate Finance Committee are advertising a potential “solution” to a government-run health plan in the form of government-chartered co-ops—funded by $6 billion in federal taxpayer dollars. While these proposals are being sold as a way to create health insurance competition, a series of quotes from prominent Democrats reveals that they view the co-op concept as merely another way to enact a government takeover of health care:

“I think in theory you can imagine a co-operative meeting that definition [of a ‘public option’].”

—President Obama, July 29, Time Magazine

“We’re going to have some type of public option, call it ‘co-op’, call it what you want.”

Senate Majority Leader Reid, July 10, Washington Post

“The [co-op has] to be written in a way that accomplishes the objectives of a public option.”

—Senate Finance Committee Chairman Baucus, June 12, Politico

“You could theoretically design a co-op plan that had the same attributes as a public plan.”

—Health and Human Services Secretary Sebelius, June 27, Bloomberg

“Chairman Baucus has asked me to sit down with Kent Conrad to see if we can use the co-op model to achieve the same goals as a public plan.”

—Sen. Chuck Schumer, June 15, Roll Call

We don’t care what it’s called. We need something that’s going to keep the insurance companies honest.”

—Sen. Chuck Schumer, July 9, Fox News

“It will have, coming out of the House, a public option. The only debate on that is what it will be called.”

—Speaker Pelosi, July 13, Reuters

Particularly given the quotes above—including those from Chairman Baucus, who is responsible for brokering this “compromise”—some Members may be concerned that the concept currently being discussed would constitute a de facto government-run health plan. Under the rubric being discussed Congress would create another government-sponsored enterprise that would be “too big to fail” and could in time require yet another federal bailout—not unlike Fannie Mae and Freddie Mac. While supporting efforts to offer additional market choices for consumers, Members may believe that the co-op plan being discussed would, rather than reducing health care costs, instead result in significant new taxpayer liabilities—both in the short term and the long term. Therefore, Members may be concerned that a co-op will do for health care what Fannie Mae and Freddie Mac have done for the housing sector.