.... COOP ALTERNATIVE TO PUBLIC HEALTH INSURANCE COMPETITION? PART TWO
The post here on Friday, August 7, 2009, "Coop Alternative to Public Health Insurance Competition," is a springboard for this post. Using the same good linked reporting as a well-informed resource, W.J. Hennigan and Kate Linthicum, "Healthcare: Roads to Reform/United Agricultural Benefit Trust Spotlighted as Model for Healthcare Cooperatives" (Los Angeles Times Online, Thursday, August 6, 2009), in this post many of the pros and cons of Health Cooperatives will be examined.
Pros for using Health Cooperatives on a national scale include that they are exempt from taxes on Premiums. In addition, they are not subject to assessments from various State Insurance Guaranty Funds. These observations were attributed to the Maine Superintendent of Insurance in the linked newspaper article. Id.
Cons or the downside of using Health Cooperatives on a national scale, as an alternative to any Public Health Insurance Option, thus include the flip side of not paying into State Insurance Guaranty Funds: Health Cooperatives do not get the benefit of the State Guaranty Funds since they are exempt from paying in to them. According to the linked article, coops have for a very long time presented a history of having insufficient Reserves and inadequate capitalization to pay Health Claims, at least in California. See id. Thus, after observing the upside of this equation, the same Superintendent of Insurance from Maine also observes that, as quoted in the article, "[m]any times it becomes a question of whether the trust will be in business when you really need it." Id.
The overall benefit to a Health Cooperative, in sum, is directly linked to its comparatively small size, compared to the much larger Health Insurance Companies. As a result, Health Cooperatives address and pay Health Claims faster than do Health Insurers and their Insureds view them as more considerate, even behaving "with a personal touch". The President and Chief Executive Officer of United Agricultural Benefit Trust, a Health Cooperative spotlighted in the article, reportedly makes this concise observation: "Because we're small, we do a lot that they're [the comparatively larger Health Insurance Companies] not able to do." Id.
Parenthetically, the United Agricultural Benefit Trust in particular is a nonprofit. Moreover, its Board "is made up of nine volunteers." Id.
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