Two of the leading strategists of the progressive wing of the Democratic Party, Mike Lux and Robert Creamer have posts expressing optimism for the enactment of health care reform. At Open Left, Mike Lux discusses and dismisses rumours that President Obama will cave to his right flank in his September 9 speech, and then Lux says:

I have always believed, and continue to, that at the end of the day, the House will pass a fairly strong bill with a good public option, and the Senate will pass a mushed-up compromise with less coverage and a trigger or co-op or some other unworkable thing. After that, the final question will be determined by who blinks in conference committee and takes a fig leaf compromise, and who stays resolute until the end. One side will walk away with some phony rhetorical nod that will allow them to go to the media and say they forced a compromise, and one side will win the policy fight. I still believe it could be the good guys.
I’m guessing Obama understands the dynamic…I think he will give a strong speech about the need to go forward on health care, while continuing to keep his options and the negotiations process moving ahead. I believe this not because I have blind faith and trust in the President, but because I think it’s the only path open to him that actually makes political sense right now.

Robert Creamer argues at HuffPo that “…The odds are very good that President Obama will succeed in passing landmark health insurance reform legislation this fall – with a robust public health insurance option. The reason is simple: it’s the high political ground.”
Creamer cites four major reasons why Obama and the Dems can claim the high ground, including — Hallelujah somebody finally said it plain — the fact that most Americans “can’t stand the health insurance industry,” and he provides some convincing statistics to back it up (e.g. – CEO’s of the 10 largest insurers had average compensation of $4,100 per hour and Cigna’s CEO retiring with a $73 mill golden parachute this fall). Creamer is also confident that Obama will bring his ‘A’ Game on September 9th, which we have seen is pretty impressive, and Dem centrists will bend, when confronted with the grim reality of being responsible for obstructing reform and owning the consequences. Finally, Creamer believes that the progressive base is energized in a big way:

…Hundreds of thousands of Progressives have been mobilized to counter the Right. They swamped the Right at town meetings at the end of August and are now conducting a week of 2000 “Let’s Get It Done” events in the lead-up to Congress’ return…There is no longer any lack of progressive intensity. The right wing assault awakened progressive passion that has spread like the Los Angeles wildfires…As Members of Congress reconvene on the battleground for this fall’s decisive engagement over health insurance reform, they will look up the political ridge and see that the cavalry has arrived.

Creamer’s and Lux’s optimistic prognosis is a welcome antidote to the toxic speculations of chicken-little pundits of the left and fear-mongers of the right. A proverb favored by MLK comes to mind: “Fear knocked at the door. Faith answered. There was no one there.”

As President Obama prepares to address to a joint session of Congress on health care reform a week from today, a couple of veteran bloggers see cause for optimism. Writing in Mother Jones, Kevin Drum reasons it out thusly in his post, “Optimistic About Health Care“:

…Republicans have been given every chance and have obviously decided to obstruct rather then work on a bipartisan compromise. So the Blue Dogs and centrist Dems feel like they’re covered on that angle. What’s more, the townhalls have shown them what they’re up against: if they don’t pass a bill — if they cave in to the loons and demonstrate that their convictions were weak all along — they’re probably doomed next year. Their only hope is to pass a bill and look like winners who get things done.
When you’re up against a wall, you do what you have to do. Politically, Dems have to succeed, and at this point they’ve all had their noses rubbed in the fact that the only way to succeed is to stick together. What’s more, Barack Obama has a pretty good knack for coming in after everyone else has talked themselves out and cutting through the haze to remind people of what’s fundamentally at stake. If he can do that again, and if he has the entire Democratic caucus supporting him, they can win this battle.
Nearly every Democrat now has a stake in seeing healthcare reform pass. The devil, of course, is in the word “nearly,” but at this point even Ben Nelson probably doesn’t want to be the guy to sink a deal if he’s literally the 60th vote to get something done. It’s usually possible to pass a bill when everyone’s incentives are aligned, and right now they’re about as aligned as they can be. That’s why, on most days, I remain optimistic.

And if the Dems have to skirt the cloture route, the reconciliation process is unlikely to draw prolonged criticism, according to Jonathan Singer’s MyDD post, “GOP for Reconciliation Before it Was Against It.” Singer nails the Republicans for their hypocricy in whining about Democrats using reconciliation, noting that they, lead by Sen Gregg no less, used it to try and open the Alaska National Wildlife Refuge to oil drilling and to pass Bush’s massive tax cuts. Then Singer adds:

This is one of those fake controversies by the Beltway, of the Beltway and for the Beltway… The American people simply do not care as much about these process debates as do those in the establishment media. If healthcare reform gets passed, voters aren’t going to harp on exactly how many votes it took — a 60-vote supermajority or a 51-vote regular majority — they are going to focus on what the new legislation means to them and to their country.

Singer is exactly right. It’s hard to imagine many voters saying “Those dirty Democrats passed reform with a majority vote. That’s outrageous.” The cautious optimism of Singer and Drum seems warranted — especially if the President can cut through the fear and gloom with a bold message based on hope and reason.

Thomas Frank has a good opinion piece, “Why Democrats Are Losing on Health Care” in the Wall St. Journal. The first part of Frank’s article is reflected in its subtitle “They Won’t Debate the Proper Role of Government,” in which he argues that Democrats should be making the health care debate in terms of “fundamental principles,” specifically “the size and role of government.” He doesn’t really address the size of government here, nor should Democrats. Ideologues already have strong opinions on the topic, and most Americans are less concerned about size than making government more effective in helping to provide affordable health security.
But the best part of Frank’s article provides a nicely-stated response to the frequently-heard protest, “Why should I have to pay for your health care?” First the set-up”

Consider the assertion, repeated often in different forms, that health insurance is a form of property, a matter of pure personal responsibility. Those who have insurance, the argument goes, have it because they’ve played by the rules. Sure, insurance is expensive, but being prudent people, they recognized that they needed it, and so they worked hard, chose good employers, and got insurance privately, the way you’re supposed to.
Those who don’t have what they need, on the other hand, should have thought of that before they chose a toxic life of fast food and fast morals. Healthiness is, in this sense, how the market tests your compliance with its rules, and the idea of having to bail out those who failed the test—why, the suggestion itself is offensive. We have all heard some version of the concluding line, usually delivered in the key of fury: By what right do you ask me to pay for someone else’s health care?

Then the response:

This image of sturdy loners carving their way through a tough world is an attractive one. But there is no aspect of life where it makes less sense than health care.
To begin with, we already pay for other people’s health care; that’s how insurance works, with customers guarding collectively against risks that none of them can afford to face individually. Our health-care dollars are well mingled already, with some of us paying in more than we consume while others use our money to secure medical services for themselves alone.
The only truly individualistic health-care choice—where you receive care that is unpolluted by anyone else’s funds—is to forgo insurance altogether, paying out-of-pocket for health services as you need them. Of course, such a system would eventually become the opposite of the moral test imagined by our Calvinist friends, with the market slowly weeding its true believers out of the population.

And the clincher:

The righteous individualists among us might also consider that our current health-insurance system, which delivers them the medicine they think they’ve earned, is in fact massively subsidized by government, with Uncle Sam using the tax code to encourage employers to buy health insurance. And were it not for government programs like Medicare and Medicaid taking over the most expensive populations, the political scientist Jacob Hacker pointed out to me recently, the system of private insurance would probably have destroyed itself long ago. That image we cherish of our ruggedly self-reliant selves, in other words, is only possible thanks to Lyndon Johnson and the statist views of our New Dealer ancestors.
One reason government got involved is that our ancestors understood something that escapes those who brag so loudly about their prudence at today’s town-hall meetings: That health care is not an individual commodity to be bought and enjoyed like other products. That the health of each of us depends on the health of the rest of us, as epidemics from the Middle Ages to this year’s flu have demonstrated. Health care is “a public good,” says the Chicago labor lawyer Tom Geoghegan. “You can’t capture health care just for yourself. You have to share it with others in order to protect your own health.”

So next time a conservative ideologue at the local tavern starts bellowing about how he/she shouldn’t have to pay for someone else’s health care, explain in the most dulcet of tones: “You already do, my friend. That’s what insurance is. When you get sick, others pay to help you recover. And when others don’t get health care, it makes your family more vulnerable to epidemics. That’s why real reform should include everyone.” It probably won’t change the ideologue’s mind, such as it is. But maybe, just maybe, a nearby listener will nod and get it.

A little less than a year ago, (then) Senator Obama spoke on taxes in Dover, N.H., and pledged,

“And I can make a firm pledge: under my plan, no family making less than $250,000 will see their taxes increase – not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes. My opponent can’t make that pledge, and here’s why: for the first time in American history, he wants to tax your health benefits Apparently, Senator McCain doesn’t think it’s enough that your health premiums have doubled, he thinks you should have to pay taxes on them too. That’s a $3.6 trillion tax increase on middle class families. That will eventually leave tens of millions of you paying higher taxes. That’s his idea of change.

Now, WaPo‘s Ceci Connolly reports that President Obama is taking “a more nuanced approach” and taxing health benefits is “on the table,” as far as the President is concerned. Les Leopold, author of The Looting of America, weighs in on the topic with a HuffPo post warning that Obama is flirting with disaster. Leopold spotlights a group of workers who won a good health care policy from Verizon in a difficult struggle and notes:

American working people desperately want President Obama to succeed. They certainly do not expect him to break his word on taxing worker health benefits….These workers also provided rock solid support for Obama, including his call for health care reform so that all working people one day could enjoy similar coverage. In fact, for these workers one of the key distinguishing points between Obama and McCain centered on the taxing of health care benefits. They felt enormously threatened by McCain’s health tax proposals, especially since the cost of many of their excellent plans can exceed $20,000 a year per active member and even more for retirees and their families. Counting those benefits as taxable income would amount to an enormous tax increase for these workers, and their union made sure they understood this point during the campaign. In fact, labor unions all over the country distributed millions of pieces of campaign literature and made tens of thousands of phone calls to drive this point home.
Yet, team Obama led by Rahm Emanuel seems incredibly out of touch with this reality. In their desperate effort to find revenues for their national health care proposals, they are “pivoting” as they signal a willingness to consider taxes on the better, more expensive health insurance benefits. If the administration continues down that path, Obama will lose these workers, now and forever. They probably won’t vote for the Republicans in the mid-term elections, but they might sit it out or fail to campaign vigorously for Democrats.

It may not be fair to blame Emanuel, but Leopold makes an important point. If Obama trades away his earlier promise, he will be hammered mercilessly with GOP ads depicting his promise and its breaking. Breaking promises is a bad idea. Breaking such clearly-stated promises is even worse. His approval numbers will tank far deeper than they are now. Leopold tosses out a roundball analogy to frame the gravity of what is at stake:

Like a good basketball player, President Obama knows how to pivot. Like a good politician he also should know when to pivot and in what direction. But if he pivots towards taxes on health care benefits, he’ll find himself alone on the court with a bunch of blue dogs and bankers as teammates, while his working class fans walk away in disgust. Even more importantly, his real team needs to see him take on the big boys… and soon.

There are times when political leaders have to admit a mistake and change a position. This is not one of those times. Obama was right a year ago. As Leopold points out, there are other, less dangerous ways to get the needed revenues. — ways that don’t break such a clearly-stated pledge and that keep faith with working people. Entertaining the notion that it would go unnoticed is asking for trouble. This trial balloon needs to sink. There are plenty of alternatives. He should pick one — or more — and protect his integrity.

To get a full sense of the void Senator Kennedy leaves in his party and Congress, consider the likely successors to replace him at the top of the powerful Health, Education, Labor and Pensions Committee (HELP), which plays a vital role in protecting living standards across the nation. In order of seniority, they are: Chris Dodd; Tom Harkin and Barbara Mikulski — fine Senators all, but none with the clout and skill of Kennedy. As Paul Kane explains in WaPo:

Kennedy ruled as the top Democrat on the committee for more than two decades, using the perch to serve as the Senate’s lead agitator for increasing the minimum wage, expanding civil rights to cover the handicapped and gay Americans, and for promoting what he long called “the cause of my life” — universal health care.

Atop The HELP committee is clearly a great place to be for aspiring national leaders, addressing core concerns of the Democratic Party. Yet, to run HELP, Dodd would have to give up the chairmanship of the Senate Banking Committee and Harkin would surrender the the helm of the Agriculture Committee, important committees, particularly in their respective states. The new chair won’t be selected until after the recess.
The stature of Democratic senators shrinks considerably in Kennedy’s fading shadow. As the media turns to other congressional Democrats to articulate their Party’s agenda, the ranks will likely appear even thinner. Kennedy was a mediagenic star of unrivaled magnitude in Congress, as well as a highly-skilled legislator. There is no other U.S. Senator with anything close to the progressive gravitas and leverage Kennedy commanded.
All of which is likely to strengthen President Obama’s hand as the leader of his Party. But it will almost certainly increase the demands on him to speak out more forcefully. Absent Ted Kennedy, there is no one other than Obama who can credibly be called “the real leader of the Democrats.” Obama will have to abandon much of his low-key approach to legislative reform and step up. It might be a good idea for him to hire a couple of Kennedy’s top staffers to help navigate health care reform and other key bills through Congress.
Obama has another burden, to lift the spirits of a nation coming to grips with the end of the Kennedy era. I know it may not mean so much to the younger generation. But I and a millions of other Americans can still remember what America felt like under JFK’s administration, the can-do spirit and sense of hope that was shattered in Dallas. We remember how RFK grew a heart in Marks, Mississippi, and how he went on to inspire a renewed faith in America’s potential as a nation where opportunity and brotherhood could flourish, his journey also clipped by assasination, just two months after MLK was killed. And then EMK, who did much to translate their dreams into legislative reality (see Ed Kilgore’s post yesterday), his life ending on the eve of fulfilling his greatest dream — health security for all Americans.
It’s a huge burden the President is called to bear. Fortunately, he has the smarts and inspirational skills to lead the struggle ahead. But he will need all the help he can get, including the expertise of Senator Kennedy’s best and brightest, and especially the support of America’s progressive community. For the President, and for all who hold fast to the dream, answering this call is the great challenge of our time.

We knew it was coming. Yet the death of Senator Ted Kennedy nonetheless leaves a gaping wound in the Democratic Party, or more precisely in the heart of the Democratic Party. No other Senator, perhaps in all of U.S. history, fought longer or harder in behalf of the disadvantaged and for working people.
When he spoke for the powerless and downtrodden, you could feel the compassion in the tremors of his booming voice. Don’t take my word for it. Give a listen here, here and here. I heard him speak once in MLK’s church in Atlanta. The microphone was unnecessary.
Born to privilege and given to character flaws in the early stages of his life, Ted Kennedy conquered his demons and became one of America’s greatest champions of social justice and an exemplar for redemption. The showhorse became a workhorse who provided his colleagues the emblematic example of a passionate, energetic and hands-on United States Senator. He was also regarded as one of the best negotiators in Congress, a skill which is sorely-needed and much-missed at this hour. (A good DNC video tribute to Senator Kennedy can be viewed here.)
A partial list of legislative reforms passed under his leadership includes: the vote for 18-year olds; abolishing the draft; SCHIP; anti-Apartheid sanctions against South Africa; a ban on arms sales to Chile’s dictatorship; and voting against the authorization of the Iraq war — which he called “the best vote I’ve made in my 44 years in the United States Senate”. He was also the point man for: the MLK holiday, every civil rights bill that came up during his tenure; minimum wage hikes and numerous laws to protect working people from employer abuse. His endorsement of Barack Obama demonstrated vision and courage and probably was instrumental in his nomination.
As Ted Kennedy joins his brothers in eternity, we are left wondering who will carry the torch for health care, in particular, in the Senate. We’ve got some great U.S. Senators. But at this critical moment, there are no Wellstones or leaders of equivalent stature and skill to fill the void. Perhaps one will now come forward and provide the needed leadership. Having a President with powerful oratorical skills helps, and now is the time for him to pour it on, so we can enact a worthy health care bill. There can be no finer tribute to Senator Edward M. Kennedy.

Michael Tomasky has a Guardian U.K. article, “Change is Tough. So liberals can’t just leave it to Obama,” which brings some welcome wisdom to the Democratic expectations game. Actually Tomasky’s subtitle, “For euphoria to give way to disillusionment is premature. Instead, supporters should battle for his healthcare bill,” provides a better indication of his theme, unwound in this excerpt:

…The mood is somewhat grim these days among American liberals. Some feel President Obama has already sold them out. Others are angrier at conservatives and their deliberate lies about aspects of healthcare reform. But even many in this latter cohort think the White House hasn’t been pushing back against the lies hard enough. Either way, expectations are diminished – nerves are fraying, temples are greying.
What a change from just six to nine months ago. During that period, from the wake of Barack Obama’s victory through the first 100 days, liberal optimism was higher than it’s been in this country for 40 years….I counselled that liberals should not delude themselves into over-interpreting the election results. They represented, I thought, a rejection of conservatism (for now), but not an embrace of liberalism. That would come only over time, and only if Obama and the congressional Democrats showed better results for people than Republicans had across a range of fronts. But the more common feeling was euphoria. So now, disillusionment has set in.
If Obama serves two terms, we are a mere 8% of the way into his tenure. That strikes me as a little early for people to be throwing in the towel. So the interesting question of the near future will be: can the Obama movement go from the euphoric phase, in which everything seemed possible, into a more realist phase in which people come to terms with the very difficult and far less exhilarating tasks associated with governing, and the often dissatisfying victories that result from the legislative process?

Tomasky goes on to note a stark contrast between liberals’ “deeply romantic view of political movements” to the “mundane and inglorious work” that was needed to actually pass landmark progressive legislation like the Civil Rights Act of 1964 — nine years after Rosa Parks and MLK launched the Civil Rights Movement. Now, Tomasky explains, comes the really hard part:

So now, liberals have to fight hard for something they’re not terribly excited about. A health bill will likely have a very weak public option or it won’t have one at all. But liberals will have to battle for that bill as if it’s life and death (which in fact it will be for thousands of Americans), because its defeat would constitute a historic victory for the birthers and the gun-toters and the Hitler analogists.

I’m hoping Tomasky is wrong that a weak public option is likely the best we can do. But I’m certain he is right that Democrats across the spectrum will have to fight for the Democratic health reform bill, regardless of the public option provision. To sit it out would make a mockery of even the concept of progressive unity, green-light the wing-nuts and encourage all-out GOP obstructionism on every progressive legislative proposal going forward.
Tomasky concludes with a sobering call to the long haul:

This is what movements do – they do the hard, slow work of winning political battles and changing public opinion over time. It isn’t fun. It isn’t something Will.i.am is going to make a clever and moving video about, and it offers precious few moments for YouTube. It takes years, which is a bummer, in a political culture that measures success and failure by the hour. The end of euphoria should lead not to disillusionment, but to seriousness of purpose.

As Tomasky reminds us, the greatest achievements of the Democratic Party have always been measured over years, not months. We should fight like hell for the best bill we can pass this year, and after the decisive vote, begin organizing for stronger reforms without missing a beat.

Eric Alterman has a perceptive post at The Daily Beast with the somewhat unfortunate title, “Obama’s Fake Bipartisanship,” which provides a slightly different angle than Ed Kilgore’s “What Price Bipartisanship?” post below. Alterman also responds to Kuttner’s question, “Will somebody please explain to me why Barack Obama is still on his bipartisan kick…What do these guys think they are getting by continuing to kiss up to the Republicans?”:

I think the answer to Mr. Kuttner’s conundrum can be found in an article, ironically enough, by one Mark Schmitt, who happens to be executive editor of, you guessed it, The American Prospect. Way back in December 2007, when supporters of both Hillary Clinton and John Edwards were pummeling Obama on what they deemed was the wishy-washiness of his bipartisan appeal in the face of so nasty an opponent, Schmitt published an influential (among liberals) argument, “The ‘Theory of Change’ Primary.” In it, Schmitt argued that liberals were “too literal in believing that ‘hope’ and bipartisanship are things that Obama naïvely believes are present and possible, when in fact they are a tactic, a method of subverting and breaking the unified conservative power structure. Claiming the mantle of bipartisanship and national unity, and defining the problem to be solved (e.g. universal health care) puts one in a position of strength, and Republicans would defect from that position at their own risk.”
…This man is, like FDR, a genuine liberal, but also a serious politician. He is not interested in moral victories or noble defeats. He wants to win. What he’s figured out, however, is that—particularly after two full decades of Bush/Clinton/Bush wars—the American people feel more comfortable with a politician who appears to reach out to the other side, who gives them a chance to play ball. This works both as an electoral strategy and a governing strategy.

if Alterman is right, and I think he is, what we have is a very crafty President, who understands that verbal gestures of goodwill and appeals for bipartisan cooperation are not necessarily the same thing as giving away the store. The public wants more civility. They are tired of what Jesse Jackson termed the “rat-a-tat-tat” of the politics of polarization. The cool hand Obama displayed in the campaign is emblematic of his approach to conflict. — a version of TR’s “Speak softly and carry a big stick.” I could be wrong, but I trust President Obama to fight for a public option, using all of the leverage he can muster, but without bellicose posturing.
Sure, Obama could also use a little more of TR’s ‘bully pulpit,’ and show more passion in advocating for the uninsured and for the public option in general. But he’s right not to get suckered into personalized attacks that make everyone involved look silly. A little dignity looks awfully good nowadays, particularly compared to the GOP’s recent side-show.
Alterman goes on to caution that Obama’s approach might not work. After all, today’s Republican party is sadly devoid of leaders like Sens. Jacob Javitz, Lowell Weicker and others who would often confound their GOP colleagues by doing the right thing. Bipartisan outreach may produce few votes across the aisle on health care. But a President who expresses a willingness to negotiate, reaches out and invites his adversaries to join him can not fairly be faulted for selling out.

Jonathan Singer’s MyDD post, “WSJ: Dems Could Split Bill, Use Reconciliation,” flags an interesting ‘trial balloon’ being floated to move health care reform forward in Congress. Singer cites a Wall St. Journal report by Jonathan Weisman and Naftali Bendavid that Democratic leaders are considering “a strategy shift that would break the legislation into two parts and pass the most expensive provisions solely with Democratic votes.” Singer says,

…There is a better than even chance that Senate Majority Leader Harry Reid, working in consultation with the Obama administration, will move forward in this regard — passing the easier parts of healthcare reform in normal order, and passing the more difficult parts using the budget process. In such a case, the Democrats could afford to lose as many as 10 votes in the Senate (including that of Ted Kennedy, who has not been seen in the Senate for months) while still enacting the more contentious portions of reform, namely a public option.

Bendavid and Weisman report that “Privately, those involved in the talks now say there is a 60% chance the split-bill tactic will be used.”
The idea here is to cull the ‘low-hanging fruit’ provisions of the health care reform package, such as requiring insurers to cover those with pre-existing illnesses and pass these measures with a few Republican supporters, allowing President Obama to keep his campaign promise about earnestly seeking bipartisan support for reforms. The more hard-to-pass elements, like as ‘the public option; would be voted on afterward through the reconciliation process, which requires only 51 Senate votes.
One upside of the strategy is that it guarantees The President and Congressional Democrats a significant victory before they fight the most bruising battle. It could build support for the more difficult to pass health care reforms, since voters would likely be impressed that the Administration passed needed reforms, sort of a confidence-builder. Momentum can be a ‘force multiplier,’ as was clearly demonstrated by Obama’s election victory (I was one of the clueless who didn’t think Iowa would be all that important in the nominating process).
If there is a downside, it might splinter Democratic supporters into “I like this, but not that so much” camps, diluting support for the more controversial measures. It might also give some members of Congress cover: “I voted for package ‘A,’ because it made sense, but not package ‘B’ because it was too expensive.”
No one really knows how this would play out. An important health care win could build support for another victory, narrow the focus and sharpen the debate. Better if they had broken the bill down into strategically-sequenced components from the get-go, gaining momentum with each new victory, instead of betting the ranch on one huge bill. That’s how single-payer systems were achieved in most democracies that have it.
That said, if the decision is to stick with the big package after all, I’m for it. The provisions seem solid, and glitches can be corrected later by amendments and new legislation. Whatever strategy President Obama and Democratic congressional leaders chose, none who call themselves Democrats should sit this one out.

Sorting out the pros and cons of the co-op option vs. the public option is the challenge of the hour for progressives who want real health care reform, and it will certainly be hotly debated. Most just-published articles and blogs equate ‘public option’ with a government plan. But it seems important to ask, is there any way that a co-op can be a public option? There is no shortage of opinions on the topic:
The New York Times has “Alternate Plan as Health Option Muddies Debate,” a probing article by by Robert Pear and Gardiner Harris. The authors spotlight some key problems with the co-op approach:

As the debate rages, lawmakers are learning that creating cooperatives — loosely defined as private, nonprofit, consumer-owned providers of health care, much like the co-ops that offer telephone, electric and other utility service in rural areas — will not be easy.
The history of health insurance in the United States is full of largely unsuccessful efforts to introduce new models of insurance that would lower costs. And the health insurance markets of many states suggest that any new entrant would face many difficulties in getting established.

More specifically,

The government would offer start-up money, perhaps $6 billion, in loans and grants to help doctors, hospitals, businesses and other groups form nonprofit cooperative networks to provide health care and coverage.
The co-ops could be formed at the national, state or local level. Proponents say that a health co-op might need 25,000 members to be financially viable, and at least 500,000 members to negotiate effectively with health care providers…they would need time to buy sophisticated information technology and to negotiate contracts with doctors, hospitals and other health care providers.
…In the 1990s, Iowa adopted a law to encourage the development of health care co-ops. One was created, and it died within two years. Although the law is still on the books, the state does not have a co-op now, said Susan E. Voss, the Iowa insurance commissioner.

Not a very promising prospect, according to ‘the newspaper of record.’ Worse, $6 billion is about what we spend occupying Iraq in one month. Iraq and Afghanistan are the ignored elephants in rooms where health care reform is being debated. Few would doubt that half of what we spend on these two wars annually could go a long way toward bringing real health security to America.
Columnist Bob Herbert is even more dismissive in his NYT op-ed, “Forget about the nonprofit cooperatives. That’s like sending peewee footballers up against the Super Bowl champs.”
In his Alternet post “It’s Now or Never for a Public Option: Why We Need to Take a Stand Against the Insurance Industry’s Greed” Joshua Holland explains,

In 2000, the Government Accountability Office conducted a study of the impact similar purchasing schemes had had to date. “Despite efforts to negotiate lower premiums,” the GAO concluded, “cooperatives have only been able to offer premiums that are comparable to those in the general small-group market. The cooperatives we reviewed typically did not obtain overall premium reductions because: 1) their market share provided insufficient leverage; 2) they could not produce administrative savings for insurers.”
The Commonwealth Fund did an analysis of the impacts nonprofit co-ops would have as well (PDF), and its findings were similar. Researchers found that, “with very few exceptions,” premiums offered through co-ops “have not been lower than those available to small employers elsewhere” because they “have not been able to reduce administrative costs … they have not had enough market share to bargain for discounts.”
Because of their inherent limitations, former Vermont Gov. Howard Dean told me in an interview last month that the co-op scheme is a “fake public option,” and “really not [a] serious health reform.” He predicted that if they were created, they would “be crushed just like Blue Cross was crushed. Most Blue Cross chapters are now for-profit. They’ve been taken over by the insurance industry. Any reasonable-sized insurance company can crush a not-for-profit co-op.”

And, in The Nation, Katha Pollit writes of co-ops,

…They’re untested, small, unregulated, that they exist in twenty states and that Senator Kent Conrad of North Dakota really likes them–but I didn’t discover what they actually are. I understand “public option,” and “public” has a good, strong ring to it–it says, Healthcare is a right, part of the common good, something everyone should have, and if you can’t afford it in the marketplace, the government will provide it. “Insurance co-op” speaks a whole other language, of commerce and complexity and exclusivity

Writing in the Washington Post, David S. Hilzenrath and Alec MacGillis explain:

“It’s very difficult to start up a new insurance company and break into markets where insurers are very established,” said Paul B. Ginsburg, president of the Center for Studying Health System Change. “I don’t see how they’re going to obtain a large enough market share . . . to make a difference.”
Karen Davis, president of the Commonwealth Fund, a foundation focused on health care and social policy research, said co-ops may not enroll enough people to negotiate favorable rates with health-care providers.
…Co-ops would lack perhaps the main advantage of the public option: reimbursement rates for doctors and hospitals set by federal law, like those paid by Medicare, the program for older Americans. Federally determined reimbursement rates were central to the cost-saving promise of a government-run health plan and a potentially powerful competitive advantage. They were also a lightning rod for intense opposition from health-care providers and private insurers, who denounced the public option as a threat to their financial survival…Co-ops would lack the ability to piggyback onto existing government institutions, like the ones that help administer Medicare.

On the other hand, Co-ops have some advantages and “could serve a useful purpose in health care — just as credit unions compete effectively with banks, prompting them to offer higher interest rates on deposits and lower rates on loans,” explain Pear and Harris, summarizing the views of Ann Hoyt, a University of Wisconsin economist who has written extensively about co-ops.

…Professor Hoyt said she had been a member of the Group Health Cooperative of South Central Wisconsin since 1985, and she reported that “the care is excellent.”…Larry J. Zanoni, executive director of the Wisconsin plan, said: “We are a testament to the success of a health care cooperative. But it took us over 30 years to get where we are today.”
Representative Earl Pomeroy, Democrat of North Dakota, said the proposal for cooperatives was “a very worthy idea.”…“The market here is uncompetitive,” said Mr. Pomeroy, a former state insurance commissioner. “A cooperative could provide an alternative source of insurance and some interesting competition for premium dollars. A co-op could operate at lower costs, in part because it would not need to pay its executives so generously as the local Blue Cross Blue Shield plan.”

There are plenty of co-ops already operating, note Harris and Pear:

…In a study published in March and financed in part by the federal government, Professor Hoyt and other researchers at the University of Wisconsin identified nearly 30,000 cooperatives with revenues of more than $650 billion a year. They include farm co-ops, retail food co-ops, rural telephone and electric co-ops and credit unions — entities as diverse as Ace Hardware, The Associated Press, Blue Diamond Growers (almonds), Carpet One, Land O’Lakes (dairy products), Ocean Spray (cranberries) and Sun-Maid Growers (raisins).

If co-ops are going to do any good, they must be adequately capitalized, particularly since guaranteeing coverage of pre-existing conditions is a cornerstone of Obama’s and Progressive concepts of health care reform. Also, there are more well-established ethics and accountability rules and regulations in government. And it is a fair question to ask if co-op employees would have enough of a commitment to public service, as well as the competence and resources to protect the health security of Americans. Also, how do you level the playing field, so giants like Blue Cross-Blue Shield don’t have such a potent edge over new start-ups?
Can co-ops actually be a sort of public option, performing a very similar role as does government? As Republican Sen. Orrin Hatch, quoted in The Times article, says “You can call it a co-op, which is another way of saying a government plan.” And, noting that Democratic Majority Leader Harry Reid called co-ops “some type of public option,” Chris Good adds at The Atlantic ‘Politics’ blog:

The RNC forwarded a press release/research memo to reporters today claiming that a “‘public option’ by any other name is still government health care.”…The idea is that co-ops (whether it’s one national co-op, state co-ops, or a national co-op with state affiliates) would serve the same function as government-administered health insurance, in that they’d operate as non-profits and perhaps utilize some added bargaining power or lower payment rates, thus forcing for-profit insurance companies to drive their own costs down, out of sheer economic necessity, once they had to compete with a non-profit that had some consumer cost advantages.

According to Rep. Anthony Weiner, as many as 100 members of the House of Representatives may see a bill with no ‘public option’ as a deal-breaker. In the Senate, however, Nate Silver guestimates only 41 solid votes for a ‘public option,’ compared to Chris Bowers’ 43. It’s hard to define the congressional consensus on the ‘public option’ between the House and Senate.
Is it ‘either/or’, or ‘both/and’? Might some kind of hybrid, that taps some of the advantages of both co-ops and government be possible? Much depends on whether co-op advocates can provide credible answers to these and other questions.