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Those Mysterious Co-ops

by Peter Suderman

As far as I can tell, co-ops currently resemble Scooby-Doo villains at the beginning of an episode: There are a number of potential options, but also a lot of uncertainty about what's really going on -- and no one actually knows which of the available possibilities we'll end up with. The main feature seems to be that they're not government run, although, as previously noted, there's some reason to believe that co-ops might, for all practical purposes, act as public plans under a different name.

In general, most everyone I've read seems uncertain about the details, and less than enthusiastic about the virtues of co-ops as policy: Mark Thoma, in the course of drawing up a quick list of what's known and possible about co-ops, points out that it's not clear they'll lower costs. The L.A. Times spotlights a small co-op that some think might serve as a model, while the New York Times reports that an attempt to foster co-ops in Iowa during the early 1990's didn't work out too well. And according to Robert Laszewski, the history of co-op insurers in the U.S. goes back even further, to when Blue Cross plans were first established six decades ago. Laszewski also thinks the idea is monumentally stupid, arguing that new co-ops would find it nearly impossible to compete with established insurers. Tyler Cowen, meanwhile, wonders why mutual plans have not been more successful.

The confusion and lack of clarity is one reason, I suspect, why support seems so tepid. Another reason is that, while some think co-ops a perfectly fine idea, they're not topping many peoples' wishlists. Co-ops, first and foremost, are about compromise, and the rosiest view, I think, is that they represent a second-best scenario for most reform supporters. Given the tentative and relatively passionless support they're receiving, I wonder: What will happen when the details do come out, and partisans on both sides start loudly airing their disagreements?