“When I use a word,” says Humpty Dumpty in Lewis Carroll’s “Through the Looking Glass,” “it means just what I choose it to mean.”
Members of Congress have this down to a fine art. Take the health care legislation recently introduced by Sen. Max Baucus, Montana Democrat and Finance Committee chairman. Some say the senator made a bold decision in not including a government-run public option in his proposal. Indeed, he seemed to be responding to the many people who see the public option as politically divisive and merely a Trojan horse for a single-payer health system.
But instead of embracing a “public option,” he included a “co-op” as a way of ensuring that Americans would have a familiar and effective alternative choice to traditional health insurance.
The word “co-op,” short for “co-operative,” is indeed quite familiar to Americans. Many Americans live in apartments in co-op-owned buildings. You can order a live lobster from the Maine Lobsterman’s co-op and have it delivered promptly to your door. Over in Wisconsin you’ll encounter the sheep breeders’ co-op. Or maybe you keep your bank account with a credit union, another co-op.
They all have something in common. They are private associations organized by private people, and they are jointly and privately owned and controlled.
So being able to get health insurance through a co-op would seem to be a good idea and very different from a government public option, right? So this part of the Baucus proposal makes sense?
Ah, but remember Lewis Carroll. It turns out that the word “co-op” in the Baucus plan has a different meeting from the way the rest of America understands it. In fact it isn’t even a word. It is an acronym. It stands for a Consumer Operated and Oriented Plan, and it is a new federal health program, not a private entity like the one that sends you lobsters or gives you your cash at the ATM.
Rather than the familiar private co-op, the Baucus COOP program has start-up funds provided by the federal government and allocated by a federal board. The new membership plan cannot even be an existing co-op organization - sorry, no health plan delivered with your Maine lobster. And while chartered by a state, it must operate according to rules established by the federal Department of Health and Human Services.
In fact, suggesting that Mr. Baucus’ COOP is a true private co-op is a bit like saying a bill titled the Treasury Agents to eXpand the Crackdown on Unsuspecting Taxpayers must reduce taxes because its acronym is TAXCUT.
What’s so frustrating is that the federal government could and should be removing barriers to ordinary Americans getting health insurance through a range of organizations they trust, such as farm bureaus, churches, AARP, unions - and yes, real co-ops. Members of Congress and millions of federal workers can do this to a degree. They can sign up for union-sponsored plans and even a “faith-based” plan certified as containing no services objectionable to the Catholic Church.
Thus federal employees can choose coverage through organizations they trust, with benefits that suit them. So why can’t the rest of us?
The main reason is tax policy. Health coverage obtained through your employer counts as tax-free compensation. But if your family wants to buy coverage directly from the Virginia Farm Bureau, or the National Postal Mail Handlers Union, you typically get no tax break. Federal employees choosing a Mail Handlers Union plan get a tax break and a subsidy.
Congress needs to give families the same tax relief for affinity-group plans obtained outside the place of work as it does for employer-sponsored coverage. That would mean new choices. And new, private competition for traditional health plans, to “keep them honest” as the president claims only a public plan can do.
True co-ops should be included as a new private option. Today’s tax law bars member-owned mutual insurance companies, like Mutual of Omaha, from functioning as a nonprofit health insurance company. If Congress changed that we would at last see mutual insurers teaming up with organizations to offer private co-op health insurance as an alternative.