Senator Conrad and some others are promoting health insurance co-ops as alternatives to a government-run insurance option. The liberal critique is that they would be small and ineffective competitors to private insurers, many of which enjoy quasi-monopolies. In today’s New York Times, Bob Herbert advises, “Forget about the nonprofit cooperatives. That’s like sending peewee footballers up against the Super Bowl champs.” It has also been noted that we already have non-profit health insurance options, like Blue Cross/Blue Shield, that charge high rates and dominate local markets. So the problem is not profit, per se, but the lack of competition, regulation, and accountability.
On the other hand, there is a movement that sees major potential in co-ops and other alternative economic arrangements. According to community-wealth.org, there are 21,840 co-ops in the United States, with annual revenues of $273 billion. So this is not a marginal or amateur sector, although there are only a few significant examples in the health field.
Co-ops can be structured so that they are forbidden to move, thus addressing the problem of capital mobility that undermines democratic governance. They can also be structured so that interested citizens have opportunities to become leaders. To be sure, some co-ops end up looking exactly like regular for-profit firms, without the actual profit line. Ace Hardware is a co-op owned by the store owners; I’m not sure that makes any difference to its customers. But a health co-op could have by-laws that encouraged participation, and the federal subsidies that are being considered on Capitol Hill could be contingent on such rules. If the start-up subsidies were big enough, I doubt there would be an insuperable barrier to gaining a large market niche.
Here are some advantages of a more participatory structure:
- People deeply distrust government, so it may be smart politics to build a more progressive infrastructure that includes mechanisms for enhancing trust, such as local ownership.
- In numerous cases around the world, public participation has been found to reduce corruption and waste. When people have decided what to spend money on, they watch to see if it is spent as promised. When the money vanishes, they rebel.
- Participation in co-ops would increase people’s civic skills and their expectations that other major institutions will treat them respectfully.
- Health decisions involve complex scientific and technical issues–but also irreducible value judgments that cannot be made “scientifically.” Co-ops can include deliberative bodies that make value judgments and tradeoffs, accountably and transparently. Moreover, those decisions can be made differently in different parts of the country, thus reducing the intensity of our cultural battles. (Yet co-ops would also be regulated by the federal government to protect rights that Congress deemed essential.)
- Co-ops could contribute to political pluralism by lobbying in the interests of their members.
Of course, “co-op” is not a magic word that solves all political and social problems. Everything depends on what the co-ops are like. But we have considerable experience now with alternative economic arrangements inside of capitalism, and we could seize on the health co-op idea to make real progress.
[As a note to my fellow proponents of active citizenship, deliberative democracy, etc.–I really think we need to drop our neutrality and start supporting policies that would enhance citizenship. If health co-ops are not the right examples, because the liberal economic critique is correct, we need to look for other openings. We can’t be for abstract procedures alone.]