'Public Option' or Co-Op? Experts Sound Off

Aug. 18, 2009— -- Murmurs from the White House that the government-sponsored public insurance option could be negotiated or even dropped from President Obama's health care reform plan in favor of nonprofit cooperatives has left the medical community abuzz and the public a bit confused.

The talk started Saturday after Obama indicated during a town hall meeting in Colorado that publically funded health insurance was not the centerpiece of his reform plan but "only a sliver" of the solution. And on Sunday, Health and Human Services Secretary Kathleen Sebelius said that co-ops are being considered as an alternative way to fulfill the president's goal of creating more competition in the health insurance industry.

Many policy experts, however, don't see co-ops as a simple substitute for the public option.

"Starting up new co-ops across the country that would effectively compete with the mammoth insurers," said Timothy Jost, a health law expert and professor at the Washington and Lee University School of Law, "is like expecting people to start up electric companies in their garages to compete with the dominant regional power company."

"The public plan is not vital to covering the uninsured," Jost added, but he said using government money to subsidize the uninsured coverage through private insurers "would be like the federal government abandoning the post office and rather paying subsidies for everyone to use Fed Ex. Without any competition, anyone to keep them honest, insurance premiums will go through the roof, and with them the federal deficit."

While politicians are digesting the apparent new turn in the health care debate, doctors and public health experts have gone to great lengths to define the difference between a public option and a co-op and what it means for patients.

The "public option" is a proposal to create a new government insurance program similar to other government insurance programs such as Medicare, Medicaid or the Veterans health care system.

But instead of offering the insurance to a select group -- such as the elderly in Medicare, or poor families as in Medicaid -- the idea would be to offer the government insurance program to a wide swath of the public.

Critics of the public option say it would lead to government rationing of health care, a government takeover of health care that would compete unfairly with the private insurance market.