Health Insurance Co-Ops vs. Government-Run Health Insurance

AIPNEWS.com ^ | September 12, 2009 | Larry M. Walker, Jr.

[EternalVigilance]

More Honest Debate What is a Cooperative (Co-Op)?

A Cooperative is a business organization owned and operated by a group of individuals for their mutual benefit. A cooperative may also be defined as a business owned and controlled equally by the people who use its services or who work at it.

There are many types of Co-Ops in the United States. I will attempt to address some of the most common cooperatives. If you belong to a credit union, you are already a member of a Co-Op. My electric and natural gas utility company is an EMC, another word for Co-Op. In the insurance industry, Co-Ops are called Mutual Companies, or Mutual Legal Reserves. Credit Unions are owned by their members. When you join, you must establish a share account and maintain a minimum balance. Your share account is your capital investment in the company. You are paid ‘dividends’ on your savings and checking accounts. Dividends are your share of the Credit Union’s profits. A Credit Union offers benefits for its members such as preference on home and automobile loans. An Electric Membership Corporation (EMC) is a service cooperative owned by those who receive its services. There are nearly 1,000 electric cooperatives in the United States. When the EMC makes a profit, those profits are shared with customers through credits to their electric bills, or lower rates. Health Insurance Co-Ops

Health Care Services Corporation (HCSC) is the largest customer owned health insurer in the United States.

• HCSC operates the Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas, employing 17,000 people and serving more than 12.4 million members - 38% in national employer plans, 32% in large local employer plans, 10% in small employer plans, 10% in individual plans and 10% in government plans.

• HCSC is the fourth largest health insurance company in the United States and the largest customer-owned health insurer. In 2008, the company's gross revenue totaled $39.9 billion (considering all subsidiaries which are not included in the chart below in accordance with GAAP).

 

• HCSC is the most financially secure health insurer in the United States, with a rating of AA- (Very Strong) from Standard and Poor's, Aa3 (Excellent) from Moody's and A+ (Superior) from A.M. Best Co.

 

• HCSC retains full or joint ownership of a number of subsidiary companies, including Fort Dearborn Life Insurance Co., Dental Network of America, MEDecision, Availity, Prime Therapeutics and RealMed.

If the HCSC model is the type of Health Insurance Co-Op being discussed in Congress, then I am a fan. Yes. Here is an idea that would have strong bi-partisan support. We can agree on Health Insurance Co-Ops. In my opinion Co-Ops are in line with the purest sense of Capitalism. On the other hand, if Congress is talking about some kind of partially Government owned, or Government controlled entity, then I am not in favor. In fact, I would like to join HCSC, or a similar Co-Op, but unfortunately it only operates in 4 states, and none of the health insurers in my state are co-ops. Fostering increased competition by allowing insurers to operate in all states would be an improvement.

The Plan

So if America wants to convert its health insurance industry to Co-Ops, the question is how? Obviously, it would be unfair, and foolish, to force the existing insurers out of business, so how do you get them to convert? I am a proponent of Binary Economics. Under Binary Economics, the only role of Government in private enterprise is to offer interest-free loans through its central bank. Existing publicly traded insurers will need to buy back all of their stock in order to make the conversion to mutual companies. Interest free loans from the Government will facilitate this conversion. The loans will be paid back over the long-term out of the profits of the insurers. Once the loans have been paid, the insured will be able to participate in a larger share of company profits. Profits will be shared with policy holders either in the form of dividends, or lower insurance rates. Interest free loans are not hand-outs, or bailouts. The money gets paid back. Granting interest free loans would be a much better use of taxpayers money than the current foolishness being promoted by certain 'linear' thinkers (right and left). The World is not flat. In fact, most good ideas come from outside of the box.

Reforms I can believe in:

1. Conversion of the Health Insurance Industry to Co-Ops
2. Tort Reform
3. Fostering Interstate Commerce for increased competition
4. No denial for preexisting conditions
5. Tax Incentives for those paying higher premiums due to preexisting conditions
6. Tax incentives for purchasing health insurance
7. Portability of policies

Reforms I don’t believe in:

1. Making health insurance mandatory
2. Taxing employers who don’t offer insurance
3. Expanding Government-Run health care
4. Excessive Government Regulation
5. Triggers

 

Sources: http://www.hcsc.com/about-hcsc/finance.htm

http://www.investopedia.com/terms/m/mutualcompany.asp

http://en.wikipedia.org/wiki/Co-op

http://www.waltonemc.com/mycoop/

http://larrymwalkerjr.blogspot.com/2009/08/government-insurance-vs-private.html

[EternalVigilance]

[GeronL]

The only “co-ops” that have been proposed would be owned by the government. Its board appointed by the President.

Their idea of a co-op is modeled on the Federal Reserve!

[EternalVigilance]

Right. Obviously that’s not what Larry Walker is talking about, of course.

You can always count on this bunch in power today to screw up all kinds of perfectly good words and ideas.

[RebelTXRose]

One thing I learned yesterday in an Ayn Rand Center & CEI seminar in DC: ANY CHANGE that enslaves ANY AMERICAN is not going to work. NO ONE has a claim on anyone else’s work - that would be forcing the doctors to be paid less for their work.

Co-ops still don’t separate politics from economics! Capitalism works - if allowed to function to the natural consequences. Watch ‘Other People’s Money’ with Danny Devito... escpecially when he talks to the stockholders about buggy whips!

[GeronL]

Yes, I understand that.

I would definitely support his idea. Just not with this Congress.

[EternalVigilance]

We all have the right to free association, politically and economically. No one has any right to tell me who I can or cannot cooperate with, within the parameters of what is morally right.

[EternalVigilance]

Oh, I hear ya.

But you can’t beat something with nothing. That’s why it is so important for us to to lay out the true moral and constitutional alternatives. That’s what all our people are trying to do at AIP. Just being against Obama and the Democrats is not nearly enough. Not even close.

[GeronL]

Oh I agree with that. But I also think that Soros has created a vast leftist movement that now has real power. They do not intend to lose it. They will not willingly allow elections to be free and they will never willingly give up power.

I think we now live in a proto-tyranny.

[BenLurkin]

>

[EternalVigilance]

You betcha.

And we can’t beat them at the game the way it is currently constituted. Their intent is to crush us with the power of money, and if we try to play their game their way they will win.

Instead, we must quickly construct a completely new principled and practical political machine that cuts media and money out of the equation, putting the communications and decision-making power completely back in the hands of the people.

That is in fact what we are doing.

[Halfmanhalfamazing]

I'm not so worried about co ops, as in cooperative.

What I'm worried about are co ops, as in co opted.

Co opted by government

[RebelTXRose]

That is exactly what Dr. Brooks was trying to get across.
the government (per the Constitution) is here to protect our liberties.

regulation is what screwed capitalism - that resulted from envy -successful people SHOULD be proud of their work and be entitled to the money they earn.

The seminar will be uploaded to the websites of Ayn Rand Center and CEI soon. It is well worth the time - one speaker at a time.

[Chickensoup]

There are some great health coops out there. The Amish and Mennonites have Mennonite Mutual Aid, ther is also Medishare.

They work.

[Rick_Michael]

interesting....