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Health Care Co-ops: Just another Public Option

The threat of a government-run public option plan in health care legislation was frightening enough to spur thousands of people to attend town hall meetings across the country and voice their dissent, sometimes angrily.

Now legislators and the national media are talking about a possible “compromise” that could replace the public option with health care co-ops. Conservatives are concerned that such an attempt will just be “government health care in yet another set of clothes,” but national broadcast or print media have practically omitted that perspective.

Senate Majority Leader Harry Reid, D-Nev., stirred up those concerns July 9 when he said, "We're going to have some type of public option, call it 'co-op,' call it what you want."

According to Nexis, ABC, CBS, NBC and CNN, as well as the five major newspapers, ignored this admission from Reid. In fact, on the three broadcast networks Reid wasn’t even mentioned in any of the 21 health care co-op stories. More than half of those stories (12) used the word “compromise” to discuss the co-ops and only 2 conservatives critical of co-ops were included.

On June 12, another senator had drawn comparisons between a co-op and public option plan. Senate Finance Committee Chairman Max Baucus, D-Mont., told Politico a co-op compromise would have to “be written in a way that accomplishes the objectives of a public option, even though” it’s not public.

The same national news media failed to report Baucus’ comment. Instead, the news media have been promoting the “compromise,” portraying it as “not government-run,” and including mostly criticism from liberals who claim a co-op would be unable to compete or who say that health care reform without public option would be worse than no reform.

Phil Kerpen of Americans for Prosperity told the Business & Media Institute, “The media is selling this as a compromise even before we know details.”

Details certainly have been missing from the media coverage, although some of that is because the Senate Finance Committee (the committee considering co-ops) hasn’t even released a proposed bill yet.

The lack of details also upset some liberals, including former Gov. Howard Dean. Dean told “Face the Nation” “no one knows what it would look like.”

Details are ‘sketchy,’ but media downplay government involvement in co-ops

Nobody knew what health care co-ops would look like, but the news media was insistent that they would not be “government-run.”

CNN, all three broadcast networks, USA Today and The New York Times all made that claim in the past month.

Dr. Sanjay Gupta, CNN’s chief medical correspondent who turned down the Obama administration’s offer to be Surgeon General, said “A co-op is not government-run, although it may have some government seed money. It is a nonprofit organization that, you know, typically is made up of people who are often members insured – meaning they want to get their insurance from the co-ops but they’re also members of the board of the co-op.”

NBC’s Chuck Todd described a co-op as “government influenced, but not (government) run.”

AFP’s Kerpen told BMI that “co-ops may or may not be government-run. Sen. Schumer has said he wants politically appointed boards. Regardless, any federal money put in would have strings attached.”

Many liberal Democrats, including Schumer who earned a 100 percent rating and “hero” status from Americans for Democratic Action (ADA) in 2008, won’t accept a co-op unless it is “beefed” up by government control. Schumer complained to Associated Press that Republicans on the finance committee had rejected “setting up a national structure for the co-ops, $10 billion in government seed money, power to negotiate payment rates to medical providers nationwide and creation of a presidentially appointed board of directors.”

CBS’s Nancy Cordes mentioned that government money might be used to start such co-ops and hinted at initial government control on Aug. 18, but didn’t express skepticism about the government handing over control of insurance co-ops after creating them.

Former Health and Human Services Secretary (under George W. Bush) Michael Leavitt was skeptical. In an op-ed for the Wall Street Journal Aug. 20, he said “The Democrats are insisting that their version of a "co-op" wouldn't be government-run health care, but I ran Medicare and Medicaid as secretary of Health and Human Services, and I know this isn't true.”

“When Washington provides the money, names the directors and ultimately pays the bills, government controls health care. Lobbyists will lobby, Congress will respond, and bureaucrats will decide who gets care, what drugs are prescribed, what procedures are covered, and how much money providers can charge. This is true for Medicare, it's true for Medicaid, and it would be true of Mr. Conrad's ‘co-ops,’” Leavitt concluded.

Conservative Critics Need Not Apply

Many people are critical of the potential co-ops compromise, including Wharton Business School Professor Scott Harrington, Leavitt and others at groups like Americans for Prosperity and Cato Institute.

But you didn’t hear their opinions on the networks. In fact, out of 21 stories on co-ops, ABC, CBS and NBC only included two conservative voices critical of co-ops. Howard Dean alone appeared four times to attack them from the left.

BMI adviser Grace-Marie Turner told OneNewsNow that co-ops would lead to government control just like Hillary Clinton’s co-op plan in 1993 would have.

"I'm concerned that any time you federalize the regulation of health insurance that you're really going to wind up with much of the package that they're talking about," says Turner. "It's just going to come perhaps more slowly, more incrementally, and through regulation rather than through legislation,” Turner said.

Harrington said that co-ops “would serve no useful purpose. And they would risk the same adverse consequences as a public plan.” His Journal op-ed Aug. 20 also pointed out the fact that co-ops are unnecessary:

“Nonprofit mutual insurance companies, most notably many Blue Cross and Blue Shield plans, already offer health insurance in many states. They are dominant players in some states,” Harrington explained.