Obama's Plan B on Health Care: Co-Ops

You heard over the weekend that President Obama and HHS Secretary Kathleen Sebelius backed off of having a public option in his health care reform package. Then an administration official, who refused to use his name, told The Atlantic that Sebelius "misspoke." The next morning, liberal Democrats like Howard Dean said a bill without a public option is not really reform, while Rep. Anthony Weiner (D-N.Y.) told the AP that "leaving private insurance companies the job of controlling the costs of health care is like making a pyromaniac the fire chief."

Are you following all of this?

No need. Of all of the hot air blown around in the last 24 hours, the most important information came from Sen. Kent Conrad (D-N.D.), the chairman of the Senate Budget Committee, who said that the Senate does not have the votes for a public option and never has.

So what does the Senate have the votes for? A "co-op," a non-profit health care company that's owned by its customers. It's an idea that Conrad has been shopping since Sen. Max Baucus (D-Mont.) asked him to find a plan to reform health care that could also pass the Senate.

Never heard of a co-op? Maybe you have. If you shop at REI or TrueValue hardware stores, you've been to a co-op. If you have Ocean Spray or Land O'Lakes in your fridge, you're buying from a co-op. If you read newspapers with articles from the AP, you're supporting a co-op.

But how would a health care co-op work?

A document circulated to the Senate Finance Committee, obtained by Politics Daily, explains that a co-op would be owned and run by consumers who buy shares in it and elect its leaders. The proposal also says:

* There are no free rides in co-ops. Every person would have to pay dues, whether they use their own money or they get a government subsidy (which would have to be worked out).

* Co-ops could be different sizes -- local, regional, or national. NYC might have several, while parts of North and South Dakota could team up to offer one.

* Under this scenario, every state would be required to have at least one co-op option.

What does a co-op look like in the real world? No need to guess. Consider Puget Sound Group Health, a co-op in Washington state that Conrad has offered as an example of how a health care co-op works.

As a member of Puget Sound, you choose between a catastrophic plan, an HMO, PPOs, or a physician network. You can enroll either on your own, through Medicare, or through your employer.

Co-ops aren't always cheap. The cost for a mid-30s single, self-employed woman runs from $78 per month for a catastrophic plan to $277 per month for full coverage, with big swings in deductibles and cost sharing. A family of four, with no employer support, would pay $244 per month to $862 per month. You can compare that to your own insurance options to see how it stacks up.

With three weeks left in the Congressional recess, it goes without saying that anything can still happen. But as of today, co-ops look like the most likely solution to the impasse on health care that the Senate has been working through for months.