What’s in Obamacare, part 10:
Consumer Operated and Oriented Health Insurance Plan
Does the recently passed health care reform legislation contain a public health insurance option? Simply put, no. Does it contain a confusingly worded work-around that will allow the federal government to issue public funds for what will essentially amount to a public option? You betcha!…Yep, that’s right, Obamacare contains what essentially amounts to a public option, run by non-profit(tax exempt) health insurance organizations, funded by the tax payers, determined by a panel of government bureaucrats. The bill refers to this hidden public option as the Consumer Operated and Oriented Plan (CO-OP) program.
What is the Consumer Operated and Oriented Plan(CO-OP) program and what does it involve?
- It is a program that will be established by the federal government to create non-profit health insurance providers that will offer government qualified health plans in the individual and small group markets.
- The government will provide loans (tax payer funded loans of course) through the CO-OP program to persons applying to become qualified non-profit health insurance issuers. The purpose of the loans is to assist in the start-up costs of the organization.
- The government will provide grants to persons applying to become qualified non-profit health insurance issuers, in order to help them meet the requirements of the state in which they are applying to become a licensed health insurance issuer.
- The government will ensure that there is enough funding to establish at least 1 non-profit health insurance issuer in each state.
- If, in a given state, no one applies to become a non-profit health insurance issuer, the government will use an unspecified amount of public funds to encourage the establishment of a non-profit health insurance issuer in that state.
- The government will establish an “advisory board” to recommend which applicants will receive public funding to start a non-profit health insurance organization…special interests come to mind.
- The organizations formed under the CO-OP program will receive tax exempt status.
What requirements does a non-profit health insurance organization have to meet in order to receive public funds?
- Must be organized under the laws of the state in which they operate, as a non-profit, member run organization.
- Must offer government approved health plans that include minimum essential benefits.
- Must not have been a health insurance issuer before July 16, 2009.
- Must not be sponsored by state or local government.
- Governance of organization activities must be subject to a majority vote of its members.
- All organization profits must be used to lower member premiums and improve benefits.
Who can apply to create a non-profit health insurance issuer under the CO-OP program?
Anyone…again, special interests come to mind.
What have we learned?
Obamacare does not contain a public option. Meaning it does not contain a government run health insurance issuer. Instead Obamacare will create a small army of 50 or more, tax payer funded, tax exempt, government bureaucrat recommended, non-profit, health insurance organizations.
Is this really any different than a public option? No, it’s taxpayer funded, and the organizations will be chosen by a government panel (who do you think they are going to pick?).
So why did they do it this way? It’s the only way they could get the votes to pass the bill in the Senate. By structuring it this way, they could say that the bill contains no public option, all the while achieving the same effect through a more abstract process.