Co-ops: Real or Phoney?

In addition page 4 of the October CBO letter to the Senate Finance Committee Chair states the Baucus Bill will “provide start-up funds to encourage the creation of cooperative exchange plans (co-ops) that could be offered through the exchanges; existing insurers could not be approved as co-ops.”

Let’s think about this for a minute. Present day insurers are entirely shut out of the game. (You can almost hear the politicians say, “We showed them.” ---but is it a pyrrhic victory?)

Whatever you think about insurers, these are the people who actually know how to do the job. They have the systems and processes in place to service the needs of their customers, send them insurance cards, provide a network of providers and pay claims. This little provision means a lot of “newbie” nonprofit companies will be popping up, by necessity.

Who are these companies? Are they reputable? Do you believe your claims will be paid in a timely manner? What is their track record? Will you get the service you expect? What assurances do we have that they will be there tomorrow to pay claims after giving them your premium dollars? Do you think this opens the public up to a lot of potential fraud? Are state regulators going to be able to handle the job, given the number of new entities that will no doubt arise due to the amount of money at stake?

Of course, we can rely on the government to protect us from the hucksters, can’t we?