James Ridgeway of unsilentgeneration has a very good article out tonight about the state of the health care reform we were promised. It is an eye-opening look at how centrist Democrats are undermining the public option and other good parts of the original plan. The latest? Health Co-ops.

True to this spirit of bipartisanship, the co-op scheme is a weak, tired, nearly meaningless idea that would represent no real alternative to business-as-usual in the health insurance industry. In the best-case scenario, which is far from guaranteed, the co-ops might have a less corporate governance structure than other insurers and receive federal subsidies for startup costs and more expansive coverage. In the worst case scenario, they would in effect be private insurance companies by another name. And at least some of the initial capital, in all likelihood, will come from the members. You can be sure all the Americans who are out of work and too poor to buy insurance people will appreciate that—and with the lower subsidies in the Finance Committee’s draft bill, most of them will still be on their own.

Much is being made of the fact that the co-ops would be non-profits. But really–so what? Almost half of Americans with private health insurance are currently covered by non-profit plans. As a whole, they haven’t proven themselves much—if any—better or cheaper than the for-profit insurers, and they still fail to cover 50 million Americans.

The giant Kaiser Permanente is a non-profit. And while some of them have privatized, many of the Blue Cross-Blue Shields are still non-profits as well—and, in fact, got started as co-ops. Some of these non-profit insurers are well known for paying huge executive salaries and hoarding huge reserves, while charging the same high rates and offering the same rationed care as private plans—and enjoying tax exemption to boot. One report by the Consumers Union found the non-profit “Blues” hoarding cash even as they raised premiums and co-pays:

As of December 2003, the 38 nonprofit Blue Cross and Blue Shield plans across the country retained approximately $20 billion in surplus, an increase of 30 percent since 2002. Concerns about “excess surplus” in nonprofit “Blues” plans have recently arisen in several states, including Delaware, Maryland, New Jersey, Pennsylvania, Rhode Island, and in Washington, D.C. In Pennsylvania, for example, the state’s four nonprofit Blues plans and their for-profit subsidiaries hold more than $6 billion in surplus, by one estimate. At the same time, 1.4 million Pennsylvanians are uninsured.

Ridgeway seems to really lament the absence of Ted Kennedy in these times of carving this bill up. He thinks it wouldn’t be being gutted wholesale if Kennedy was there. He also notes that one of the Senators at the head of the bill negotiations is Max Baucus of Montana. He also happens to be the #1 recipient of money from health related concerns in the Senate.

Ridgeway writes primarily about the politics of aging. He is a great writer, and has good stories to tell. I highly recommend that you check him out.