August 17, 2009 11:11AM

About Those Health Care “Co‐​Ops”…

Having Congress charter a health insurance “cooperative” is just another way of creating a new government‐​run program that would drive private insurers out of business.

The definition of a cooperative is a health plan governed by its enrollees. Since a government chartered co‐​op won’t have any enrollees at first, it will be governed like any other government program. So when the Obama administration and congressional Democrats say, “We’re going to create a co‐​op,” what they mean is, “We’re going to create a new government health program but we will turn it over to the members in five years. We promise.”

As I explained in a recent Cato study, a government‐​chartered co‐​op would become just another Fannie Med:

It makes no difference whether a new program adopts a “co‐​operative” model or any other. The government possesses so many tools for subsidizing its own program and increasing costs for private insurers—and has such a long history of subsidizing and protecting favored enterprises—that unfair advantages are inevitable.

Who was it that said that thing about putting lipstick on a pig?