Reid: Co-ops could be as effective as a government-run plan

Senate Majority Leader Harry Reid (D-Nev.) said Thursday that healthcare cooperatives could be as effective as a government insurance plan, a stance that could draw strong criticism from liberals. 

Reid has said that he personally favors setting up a government insurance program, but by stating his willingness to support co-ops as an alternative, he is taking a markedly different position than House Speaker Nancy Pelosi (D-Calif.).
 

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Pelosi has said that co-ops may be a good idea but that they cannot replace a government-run plan. She has warned that healthcare legislation without a public option would not pass the House.

“The purpose of a public option is to create competition, which is so important, and to create quality healthcare,” Reid told reporters during a press conference.
 
“If we can come up with a concept of a cooperative that does just that, that is it makes more competition and makes insurance companies honest, yes, I think that would fill the bill,” Reid said.
 
Reid explained that the fundamental problem is that insurance companies enjoy anti-trust exemptions and therefore have little incentive to offer consumers the best possible deal. He suggested that co-ops could compete as effectively as a public option.
 
No lawmaker has unveiled legislation detailing the set-up of co-ops. Generally, supporters envision health co-ops as insurance plans that would be owned by policyholders. The theory is that the co-ops would provide quality coverage because profits would be re-invested into giving members the best possible coverage for the money they pay.
 
Reid also declared Thursday that President Barack Obama’s speech before a joint session of Congress would be a “game changer” in the healthcare reform debate.
 
Reid also said that skeptical centrist Democrats would in the end support the president’s signature domestic initiative.
 
“The details he outlined will provide guidance for what we are going to do in the Senate and what we’re going to do in Congress generally,” Reid told reporters at a noontime press conference. “Everything he talked about will be legislation that preserves patients’ choice, lowers cost and improves the quality of care.”
 
Sen. Charles Schumer (D-N.Y.), the vice chairman of the Senate Democratic conference, said Obama made a concerted effort to reach out to Republicans by praising GOP Sens. John McCain (Ariz.), Chuck Grassley (Iowa) and Orrin Hatch (Utah).
 
“The ball is now clearly in the court of the Republican Party; are they going to continue to say no or are they going to meet us partway?” said Schumer, who predicted that independents would begin to shift to Democrats in the healthcare debate if they see that Republicans refuse to cooperate.
 
Senate Finance Committee Chairman Max Baucus (D-Mont.) told reporters earlier in the day that Obama’s speech had given new life to bipartisan negotiations.

"The president’s speech kind of breathed new life into what we’re doing," Baucus said. "It's basically our plan."

Baucus noted that the policies Obama outlined closely match the proposal Baucus presented to his bipartisan group last weekend and which will be the basis of a bill he will introduce next week and mark up in the committee the following week.

Though Baucus's bill will not include a public option, which Obama again endorsed Wednesday, the president's speech left open the door to two specific compromises concocted by senators negotiating with Baucus.

Baucus has embraced Sen. Kent Conrad's (D-N.D.) proposal creating federally chartered, not-for-profit, member-owned healthcare cooperatives that would compete with traditional insurers. Sen. Olympia Snowe (R-Maine) has floated the idea of a public option "trigger" that would only be pulled if private insurers fail to enroll enough people under reform.

In his speech, Obama adopted the $900 billion price tag of Baucus's proposal rather than the $1 trillion-plus cost estimated for other healthcare bills pending in the House and Senate. Obama also reiterated his support for the creation of an independent panel to set Medicare payment policy, which Baucus has included in his proposal.

Generally, Obama's speech and Baucus's proposal match the other Democratic bills in structure. Reform would create health insurance exchanges for individuals and small businesses, offer subsidies or tax credits to low- and middle-income people and to small-business employees, require most people to obtain coverage and most employers to provide it, enact insurance market reforms to expand the availability of coverage, and expand the Medicaid program.
 
Reid warned that if Republicans don’t agree to a deal, “we can always go to reconciliation, which we don’t want to do.”
 

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The leader predicted that the party would stay unified on procedural votes to bring healthcare reform up for a vote on the Senate floor.

“We’re going to be fine with the moderates; I’ve had a number of conversations with the moderates,” he said.

Obama's remarks sparked renewed activity on several specific -- and highly controversial -- issues, Conrad said. At Thursday's meeting, the bipartisan group addressed illegal immigrants, abortion and medical malpractice reform.

In particular, Conrad said, the senators were compelled by Obama's speech to revisit previously settled questions about how to ensure that illegal immigrants do not receive benefits under a reformed healthcare system.

"We really thought we'd largely resolved this question of people who are here illegally but, as we reflected on the president's speech last night, we wanted to go back and drill down again [to] make sure that what we'd earlier concluded is right on," Conrad said.

The senators also discussed proposals to address medical malpractice, Conrad said, though he acknowledged that the Judiciary Committee would have to tackle that issue if it were included in healthcare reform.

The gang of six, which includes Baucus, Conrad, Snowe, committee ranking member Chuck Grassley (R-Iowa), Democratic Sen. Jeff Bingaman (N.M.) and Republican Sen. Mike Enzi (R-Wyo.), will continue to meet until Baucus introduces his bill next week.
 
Reid said he hoped Congress would pass healthcare reform “well before Thanksgiving.”