Health Insurance Articles

What Are Health Cooperatives?

2009-11-24

Over the past few decades, health insurance has become a hot button issue in the United States, with some people rooting for a public plan, and others demanding socialized medicine as practiced by Canada, the United Kingdom, and elsewhere. In fact, health care coverage is a major issue for Americans, in the political, economic and healthy industry infrastructures. In the United States, ideas for health care reform are the topics of debate in the professional, political and personal arena. Health cooperatives are considered a viable option for people who want to have a bigger impact on their own healthcare.

Simply put, a health cooperative is an organization where the customers form a network to control insurance rates, coverage and practitioners. Privately held health insurance companies are taken out of the equation, as cooperatives function as a non-profit organization. Some of our big name insurance companies, such as Omaha Mutual, started out as health coops, but moved into privatization. Health cooperatives were popular among farmers in the rural Midwest in the early to mid-20th century, but fell largely into disuse in 1947, after the Farm Security Administration withdrew their backing. This led to private health care organizations and managed care as we know it today. However, this has not been the rule for all health care coverage.

While some health cooperatives survived and in fact continue to thrive, such as Group Health Cooperative in Seattle and other, smaller groups in the Midwest, they have not been the norm, nor have they received much attention until recently, with the recent scrutiny into health care coverage and administration. Many politicians and private citizens feel that health co-ops might be the "happy medium" that the government needs to offer greater insurance coverage to Americans.

Health cooperatives allow consumers and employees (in essence, the owners of the company) to have a greater say in their personal health insurance policies while allotting power in election of board members, participating providers and prescription coverage. It keeps the federal government out of the governance of health care, which makes it appealing to moderates and members of both major political parties, as well as Independents. However, generally speaking, the set-up of a cooperative can be difficult. It relies on localized, in-network care, which can be difficult for people who travel or move frequently. There are models for interested parties to follow, and should be considered in great detail.

There are many pros and cons to health cooperatives; the option should be researched fully by those who are interested and wish to educate themselves about health care reform options.