Obamacare's Health Insurance Cooperatives

Morning Edition:

Many of us know the names of some of the big U.S. health insurance companies — like Blue Cross, Aetna, and Wellpoint. But what about CoOportunity Health, or Health Republic Insurance of New York? These are among 23 new companies started under The Affordable Care Act. They're all non-profit, member-owned insurance cooperatives that were begun, in part, to create more competition and drive prices down.
The co-ops' rollout was funded almost entirely by federal government loans. Initial enrollment numbers for many look pretty good — but that may not be enough to make co-ops successful.
Karl Sutton, for one, says he's stoked about being able to buy health insurance through a co-op. Sutton lives in a scenic region of Montana just south of Glacier National Park, where tall, dark forests and taller mountains are blanketed white in early March....
Sutton understands co-ops because he works in one: a 10-year-old growers co-op, with revenue of more than a million dollars a year. It's run by and for its members.
Sutton says he wants that model for his health insurance company, too.
"When you buy into a co-op, that entitles you to one vote in the decision making, and I think it's the one business model that actually aligns with our democracy," he says. Sutton was eager to join the new Montana Health CO-OP. He thinks if members own the company, they're less likely to overuse health care – and that saves everyone money.
He knows the insurance startup is new, and still unproven.
"There's a degree of concern," he says, "but ... we might as well try, because if we don't have the membership, then the health care co-op isn't going to succeed. So we have to start somewhere, and I'm willing to take that risk."
A couple hundred miles and several mountain ranges away, John Morrison has a comfortable law office in Last Chance Gulch, the downtown historic district of Montana's capital, Helena. Morrison was the first president of the National Alliance of State Health CO-OPs.
"In some states co-ops are dominating the marketplace," Morrison says, "with 80 percent of the enrollees going to the co-op."
That's in Maine. Morrison says most co-ops are very happy with their enrollment numbers. Their rates are often the lowest that are available through an exchange.
"The co-op states have 8.4 percent lower premiums, on average, than [other states] across the marketplace," says Morrison. "So co-ops are creating that competition. They're keeping rates down in the states they're operating in."
But Montana's co-op still has managed to win about 40 percent of the new exchange market. Co-ops now have 50 percent of the new market in Nebraska and Iowa, and 60 percent in Kentucky. Dworak attributes Montana's early success, in part, to tirelessly beating the bushes for customers.
"It's grassroots," he says. "One thing about Montana: What really plays is what one Montanan says to another one in a coffee shop."

The article goes on to point out that some co-ops might not work out that well because it is hard in health insurance to be able to set the premium rates ahead of time when you don't know what mix of pre-existing conditions (which Obamacare prevents companies and co-ops from discriminating against) and health issues you'll have in your pool.  So rates may jump next year or the year after.  One significant thing that will provide a cushion is that like with the Rural Electrification Act, the health insurance cooperatives have federal startup loans to help them get a foothold for sustainability.

The interesting thing to me is how cooperatives flourish so strongly in rural areas.  I like my electric cooperative, my fertilizer cooperative and my credit union.  I like the fact that I know that profits generated in those operations will come back to me in patronage dividends.  They aren't getting paid out to the "malefactors of great wealth" on Wall Street.  Apparently, lots of other rural folks like the same attribute of co-ops.  However, co-ops are a sort of hybrid operation between a capitalist joint-stock corporation and a more socialist model of organization.  The "economic democracy" of cooperatives strikes at the main tenet of capitalism, that capital is more important than humanity (from Wikipedia):

Cooperatives often share their earnings with the membership as dividends, which are divided among the members according to their participation in the enterprise, such as patronage, instead of according to the value of their capital shareholdings (as is done by a joint stock company).

Cooperatives are typically based on the cooperative values of "self-help, self-responsibility, democracy and equality, equity and solidarity" and the seven cooperative principles:[18]

1. Voluntary and open membership
2. Democratic member control
3. Economic participation by members
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community

Cooperatives are dedicated to the values of openness, social responsibility and caring for others. Such legal entities have a range of social characteristics. Membership is open, meaning that anyone who satisfies certain non-discriminatory conditions may join. Economic benefits are distributed proportionally to each member's level of participation in the cooperative, for instance, by a dividend on sales or purchases, rather than according to capital invested.

As one might quickly notice, these are not attributes for which the Republican party frequently strives for.  The GOP is much more interested in the well-being of capital and those malefactors Teddy Roosevelt (GOP stalwart back in the day) railed against.  While they often speak of self-responsibility (except in the case of Obamacare, where they maintain that people shouldn't be required to purchase health insurance), they less frequently get to democracy, equality, equity and solidarity.  So it strikes me as odd that so many rural residents, who are so fond of cooperatives, are so quick to support Republicans, who work very hard for their paymasters to undermine cooperatives and credit unions.  To me, this is the mystery of modern political life.  I have my suspicions why this is, but I won't speculate on that here.