Conservative media figures including Sean Hannity, Rush Limbaugh, Ralph Reed, and Mark Steyn have advanced the GOP talking point that health care cooperatives are, in Hannity's words, "basically the same thing" as the public option "with a new packaging." But mischaracterizing cooperatives as identical to the public option ignores numerous economists who have argued that cooperatives will be less effective than a public option.
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Media conservatives advance latest conspiracy: Co-op is public option in disguise
Hannity: "[T]he cooperative plan is basically the same thing with a new packaging." Discussing reports that the Obama administration might support health care cooperatives as an alternative to the public option, Hannity claimed, "I think the cooperative plan is basically the same thing with a new packaging." He then asserted that "this is still going to be government-run health care." [Fox News' Hannity, 8/17/09]
Steyn: Co-op no different than public option. While interviewing columnist Mark Steyn, Hannity asked, "The co-ops. But is a co-op any different than the so-called public option?" Steyn responded, "No, I don't think so, because in the end if you have a government perspective on health care, it leads to rationing." [Hannity, 8/17/09]
Reed: "government-run plan now masquerading as a co-op": Appearing on Hannity, former Christian Coalition of America director and Republican strategist Ralph Reed asserted that "the co-op they're talking about is going to be heavily subsidized by the federal government." He then claimed, "Remember that the public option, the government-run plan now masquerading as a co-op, is going to set rates below market rates. It will be subsidized with your and my tax dollars." [Hannity, 8/17/09]
Limbaugh: "If you're going to try to fool us by thinking you're dumping the public option, well then come up with some name that doesn't reek of liberalism." Discussing co-ops, Limbaugh claimed, "Look, I know liberal lingo when I hear it. A co-op? Yeah, let's go to the farmers market. Let's go to the community garden! What, do they think we're idiots?" He continued:
They said they want to cover the uninsured. We can do that without doing this. They said they want competition, they said. OK, great, we can do that, too. But they want single payer, and they're not going to give up and there's no competition in single payer.
They tried the back door of the phony public option, and it didn't work because people figured out what the public option is. People are not that stupid, especially when you tell 'em, "OK, you got private insurance agencies here in the private sector, and then you've got the public option," and you've got businesses who are already panicked at their health care costs who would love to offload their health care costs to the government, the public option. And the public option run by the government, it does not have to turn a profit so if you do -- if you have to make a profit in the private sector -- there's no way you can compete and stay in business with an outfit that doesn't have to make a profit. Now, co-ops. Co-ops. As long as they're going to create some government entity and as long as they're going to make private insurance unsustainable with limits and regulations and taxation, their objective is the same. Co-ops! Man, you people at the administration, if you're going to try to fool us by thinking you're dumping the public option, well then come up with some name that doesn't reek of liberalism. [Premiere Radio Networks' The Rush Limbaugh Show, 8/17/09]
Claim echoes GOP press release
GOP: " 'Public option' by any other name is still government-run health care." In an August 17 press release, the Republican National Committee asserted:
Co-Ops Would Be Funded By Federal Government. "Senator Kent Conrad, a Democrat, proposed creating nonprofit, member-operated health cooperatives to compete with insurers ... The government would offer start-up money -- Conrad said $6 billion would be needed -- in loans and grants to help doctors, hospitals, businesses and other groups form nonprofit cooperative networks to obtain and provide healthcare." ("Q&A -- Co-Ops In Focus In U.S. Health Care Debate," Reuters, 7/30/09)
Co-Ops Would Be Regulated By Federal Government. "Advisory board makes recommendations to HHS Secretary who makes final decisions about approvals of business plans ... Business plans must meet governance standards, and eligible applicants must meet the standard for non-profit, participating mutual insurance." ("Senate Finance Committee Draft Proposal," 6/19/09)
Co-Ops Would Force Individuals Who Want To Join To Go Through State Governments. "Co-op membership would be offered through state insurance exchanges where small businesses and individuals without employer-sponsored plans would shop for health coverage." ("Q&A -- Co-Ops In Focus In U.S. Health Care Debate," Reuters, 7/30/09)
Federal Government Would Use Co-Ops To Monopolize Health Insurance. "[T]hese co-ops sound a lot like a health-care Fannie Mae and Freddie Mac, which Congress created because there was supposedly no secondary mortgage market. The duo proceeded to use their government subsidy to dominate the market and drive out private competitors." (Editorial, "Fannie Med,"The Wall Street Journal, 7/30/09) [RNC press release, 8/17/09]
Progressive economists argue public option far more effective
Reich: Co-op "bamboozle" "won't have any real bargaining leverage to get lower prices." In a June 11 post to The American Prospect's blog, Tapped, former Clinton Labor Secretary Robert Reich described the co-op proposal as a "bamboozle" and said "[n]onprofit health-care cooperatives won't have any real bargaining leverage to get lower prices because they'll be too small and too numerous. Pharma and Insurance know they can roll them. That's why the Conrad compromise is getting a good reception from across the aisle." He continued:
The truth is that there's only one "public option" that will truly bring down costs and premiums -- one that's national in scale and combines its bargaining power with Medicare, and is allowed to negotiate lower drug prices and lower doctor and hospital fees. And that's precisely what Pharma and Insurance detest, for exactly the same reason.
Whatever it's called -- public option or chopped liver -- it has to be able to squeeze Pharma, Insurance, and the rest of the medical-industrial complex. And the more likely it is to squeeze them, the more they'll fight it. And the greater the opposition from Republicans, and from Dems who either believe any bill has to have some Republican support or who have sold themselves out to the medical biggies.
As long as single-payer is off the table, then we need a real public option. Don't be fooled by labels. Demand the real thing. [Tapped blog post, 6/11/09]
Hacker: Co-ops "not going to have the ability to be a cost-control backstop, much less a benchmark for private plans." In a June 14 post to The New Republic's blog, The Treatment, University of California-Berkeley professor Jacob Hacker argued that Sen. Kent Conrad (D-ND) "has offered no reason to think that the cooperatives he envisions could do any of the crucial things that a competing public plan must do." Hacker continued:
An easy way to think of the public plan's functions is the three "B"s: We need a national public plan that is available on similar terms in all parts of the nation as a backup. This plan has to have the ability to improve the quality and efficiency of care to act as a benchmark for private insurance. And it has to be able to challenge provider consolidation that has driven up prices to serve as a cost-control backstop.
Cooperatives might be able to provide some backup in some parts of the nation, but they are not going to have the ability to be a cost-control backstop, much less a benchmark for private plans, because they are not going to have the reach or authority to implement innovative delivery and payment reforms. And so Conrad's idea appears to be yet another compromised compromise that cuts the heart out the idea of public plan choice on the alter of political expediency. [The Treatment blog post, 6/14/09]
From the August 17 edition of Fox News' Hannity:
HANNITY: All right. Here's my final question for you. Look, they may be repositioning where they are. I don't believe they've given up their ultimate goal --
STEYN: No, no.
HANNITY: -- which is the elimination of the employee benefit system, a single-payer system. Obama is on record as even saying he wants.
Where does this end up? Do they now go back to the drawing board, come up with new talking points? Do they go through incrementalism? What do you think?
HANNITY: But is a co-op any different than the so-called public option?
STEYN: No, I don't think so, because in the end if you have a government perspective on health care, it leads to rationing. The thing about a death panel isn't that it's a panel that actually says, "We're denying you this treatment." It's that the whole system is, in fact, a kind of death panel, because it has to make judgments about letting --
HANNITY: Right. Right.
STEYN: -- Mr. Smith live and Mr. Jones live. It's the nationalization of your body.
HANNITY: I'm so glad --
STEYN: They have the -- the government says we have the right to decide whether you can have your hip replaced.
REED: Sean, let me tell you how weak a position he's in. He is now caving on one of the central tenets of his major domestic policy initiative, waving the white flag of surrender, not to get a single Republican vote. This is to try to keep his own party together.
HANNITY: Yes, I think there's truth to that, but I'm a little more cynical than you, because I think --
REED: I can't imagine that.
HANNITY: Well, I -- no, no. I think -- I think the cooperative plan is basically the same thing with a new packaging.
BOB BECKEL (Fox News contributor): Oh, come on.
REED: They will try. They will try. You're right.
BECKEL: Can I say one thing here? Do you mind if the liberal side of this panel says something for a second? First of all, waving the white flag of surrender, that's something new. Hannity used that one five years ago on the war, against me. But look, let me explain something to you.
BECKEL: I did get very angry, but I'm not going to be tonight. You know why? Because I'm in a good mood. I'm still trying to figure out what -- what Greta was talking about, six months -- but that's all right.
Look, the fact of the matter is at this very desk two months ago, I told you that we're going to end up with cooperatives. Cooperatives had been -- were started in 1929. A lot of them worked very well. They are not going to be some cover for some public plan.
And here's where you're both dead wrong. There is going to be a health bill passed. The Democrats cannot afford not to have it passed. And here's my secret for you tonight. It's going to include tort reform, and the Republicans are not going to be able to sit back and be against it.
REED: They'll never go against the trial lawyers.
BECKEL: And I will repeat: Barack Obama is the greatest president since Franklin Roosevelt.
HANNITY: You're out of your mind.
BECKEL: I know, you keep saying that, but I think I'll say it.
HANNITY: The problem with government-run health care is not just the public option. It's government control over the means, the services, the pricing, and the supply. And that's where we get into the specificity of whatever this final bill is going to be. If they control that, that's government-run health care.
ISABEL KAPLAN (author, Hancock Park): This isn't about a government-control health care system.
HANNITY: It absolutely is.
KAPLAN: It's about providing an option -- an option for the people who have no means of health care at the current time.
And I think the bill is absolutely not dead. And Nancy Pelosi came out again today saying that she's in firm support of having a public option. And Howard Dean, many other congressmen --
HANNITY: Here's the problem. If the government says, you know, for example, if they're going to manage us, who's covered and who's not covered, who gets to charge what, and who gets to get what care, it's still government-run.
KAPLAN: The idea is to provide more competition.
REED: Look, the co-op -- Sean, the co-op they're talking about is going to be heavily subsidized by the federal government.
REED: They're talking about initial subsidy of $3 billion. You know that that's just the tip of the iceberg. They're always wrong on their projections. So this thing is going to be multiples of that.
And here's the other thing. Remember that the public option, the government-run plan now masquerading as a co-op, is going to set rates below market rates. It will be subsidized with your and my tax dollars. And you know what that's going to do? That's going to lead to substandard care across the board, and it's going to be a major problem.