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Kent Conrad Explains Why Co-Op Option Came About

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Simply put, because heath care reform may not happen without it. They simply don’t have the votes to reach 60.

Ezra Klein interviewed Conrad today, and this is the gist:

Maybe it would be most useful to tell you how I got into this. The G-11 group, which is the members of the Senate, Republicans and Democrats, chairmen and ranking members of the key committees, who’ve been given the overall responsibility to coordinate health care reform in the Senate, asked me 10 days ago to come up with something to bridge the divide between those who are strong adherents to the public plan and those who are strongly opposed.

The co-op structure came to mind because it seems to fulfill at least some of the desires of both sides. In terms of those who want a public option because they hope to have a competitive delivery model able to take on the private insurance companies, a co-op model has attraction.

And for those against a public option because they fear government control, the co-op structure has some appeal because its not government control. It’s membership control, and membership ownership.

However, it doesn’t appear to be as decentralized as I had first though, although the reason why it wouldn’t be makes sense. These co-ops need to be large enough to negotiate prices. And that means that in some states they’ll have multiple co-ops and in other instances, a couple states may need to band together.

Here’s more…

I offered the G-11 group three models. One is state-based, so every state has one. I don’t think that works frankly. in states like mine, the pool wouldn’t be big enough. The second would be a national entity. That’s probably too limiting as well.

What you probably need is a national entity with state affiliates, and the further flexibility so those states can have regional pools. So in our part of the country, you might have North Dakota, South Dakota, Montana, and Wyoming go together. Out east you might have Maine, Vermont, and New Hampshire together. We’re consulting with experts tomorrow about that.

Yes, it’s more complicated than the public option on the table, or even single payer, but it does make some sense to think regionally. Because health care costs are different in different parts of the country. What the market can bear and all that. This idea addresses that.

More as it develops…