At the outset of the debate over health insurance reform, two goals were established: expanding coverage and controlling costs. The recently enacted legislation expanded coverage significantly, but did little to accomplish meaningful reductions in the cost of heath care. This is a problem that we, the people, can fix without any help from the government.
Forming health insurance cooperatives is the key to achieving a dramatic reduction in the cost of health care, without sacrificing the quality or quantity of care. During the period when a public option was being stripped from the legislation, one alternative proposed by opponents of a government-run plan was health care cooperatives formed by groups of private individuals.
I suspected at the time that private health insurance companies and their lap-dogs in Congress were confident that health care cooperatives would not materialize, or that if they were formed, they would not succeed. The American people stand to save a lot of money if their confidence proves to be misplaced.
Health care costs are presently consuming approximately 16% of our GDP and the percentage is steadily rising. All of the other major industrialized countries are spending 9% to 10% of their respective GDPs. Nearly all of the difference between our costs and other advanced countries is attributable to the involvement of private, for-profit health insurance companies. Administrative costs for Medicare add 3% to the cost of the care provided. Administrative costs and profits at private health insurance companies add about 30% on average.
Do the math. If we eliminate the middlemen (private health insurance companies) we can reduce the cost of health care by roughly 27%. That would reduce the percentage of our GDP devoted to health care to somewhere around 11%.
The inclusion of a public option was favored primarily by progressives. The mandate to purchase health insurance from private companies has been taking fire from the tea-party people and other advocates of limited government who are justifiably concerned about a law that forces people to purchase insurance from private companies.
What we have here is a clear opportunity for both wings of the bird to work together the way wings are supposed to work. We can improve the flawed legislation passed by Congress and make it fly right.
Both tea partiers and progressive organizations have demonstrated the ability to organize large numbers of people. Progressives organizations, such as Move On and Health Care for America Now, should utilize their cumulative (and sizeable) organizing abilities to spearhead a movement to form a health insurance cooperative.