Blogger Nancy Thorner was right on track when she posed the question, "Could co-ops be a Trojan Horse?" They are. Absolutely. But it's not just universal health care concealed within. There's also a secret weapon in there that could give progressive Democrats control of Congress for many years to come.
Although the actual financial model for cooperatives has not been revealed, allow me to make some intelligent guesses based on a quarter-century of underwriting and marketing health insurance plans of all sizes, from Fortune 100 companies to mom-and-pops: The cooperatives being touted by members of the Senate Finance Committee are nothing more than a different version of the "public option plan" designed to lay the framework for universal health insurance.
Cooperatives in their purest form exist solely for the benefit of their members and are likewise funded and run by members. However, health care cooperatives will be nothing close to pure. Instead, they will exist for the benefit of the Democratic Party, will logically need subsidies from the federal government and will likewise be controlled by the federal government. Why? Just follow the money.
Health care cooperatives will need large sums of start-up capital that first-to-join members will in no way be able to pony-up. So where will they get the money to start operating? Private investment banks? No way. Cooperatives are nonprofit and initial membership numbers will be so small that there will be little or no incentive for investment bankers to justify taking on the risk. (That is unless Rahm Emanuel has already struck deals with the likes of Goldman Sachs, Bill Gates and Warren Buffett.) But back to the horse meat that most Americans will find tough to chew and even tougher to swallow, and in which the progressive minority will delight: Cooperatives will be dependent on tax dollars to exist and that comes with top-to-bottom, front-to-back government control.
Cooperatives will be subject to the same financial risks as private insurance plans: The possibility of single catastrophic claims and greater than expected overall health care costs. Will cooperatives be able to transfer those risks to an insurance company with a reinsurance policy? Only if it is mandated by an act of Congress because it takes years (usually at least three years) of actual plan profit/loss data to just be considered for reinsurance coverage. That reality leaves the federal government as reinsurer of last resort for health care cooperatives.
Further, it logically follows that a progressive dominated Congress fueled by a collaborative White House will have the political clout to artificially make each cooperative the cheapest option in their respective geographic markets. They will achieve this by selectively appropriating tax dollars based on the progressive definition of fairness: Those who need the most will get the most. Then, as cookie-cutter cooperatives spread from sea to shining sea it will be an easy act of Congress to merge them into a single, universal plan run by the federal government. Giddy-up.
Finally if cooperatives are part of health care reform, Democrats will use them to strengthen their control of Congress. Cooperative start-up financing will be subject to Congressional appropriation and Barney Frank will make sure money is doled out to best serve Democrats while punishing Republicans. Cooperatives located in districts represented by members of the Progressive Coalition will be funded first, followed by centrist Democrat districts, then the Blue Dogs... You get the picture? And as the carrots are handed out the message to voters in Republican districts will become, "If you want a cooperative, then vote for Nancy Pelosi's hand-picked candidate."
Hi-ho, Silver. Away!