I agree that health insurance cooperatives keep health costs down for their insured, because they are consumer-owned. The key word here is "cooperative". Co-ops are member or consumer-owned, which makes the organization non-profit. Plus, the other competitors will have to compete with co-ops, by keeping the costs down.
Health insurance cooperatives are different from typical ones in that they target more of a middle and lower-class background. In order to make a profit, they have to keep up quality, while keeping costs down for the insured, so they do so by power of negotiation with large numbers.
I worked at a non-profit that helped older adults get the best service they could from Medicare. By and large, the people who had government-provided Medicare got better service and had fewer problems than those who received their benefits through traditional HMOs. Cooperatives and other organizations can cut many of the costs that these HMOs inflict on consumers.
Health insurance cooperatives keep health costs down for their insured because they are owned by the consumers themselves. Being owned by the insured makes health insurance cooperatives nonprofit, keeping the costs to maintain the co-op under control. Another benefit to health insurance cooperatives is that their existence will offer competition to other health insurance companies and would serve to keep all health coverage costs down.
Health care cooperatives can keep costs down for healthy patients with few serious illnesses. The jury is still out on quality of care, however, cooperatives like Group Health do help a lot of consumers, both individuals, and companies, to keep costs down.
Health insurance cooperatives are a good and cost-effective alternative as opposed to traditional retail insurance plans. The premiums are affordable, the coverage is comparable and the costs associated with doctor visits and medical procedures, are significantly less because these organizations are able to directly negotiate with physicians, health clinics, community hospitals as well as conglomerates on every single procedure. This keeps overall costs down while insuring continued business for the medical establishment and simultaneously provides comprehensive coverage to all patients without sacrificing quality of care.
This is especially truly in rural states whose populations cannot match those with heavily populated urban centers. Insurance companies are loathe to insure applicants in those areas because business-wise, they can make more money by targeting resources towards densely populated areas. In those instances, a formation of a co-op in those areas will help create a viable pool of applicants to insure, helping to keep costs down due to the "strength in numbers" concept. This is especially true in bargaining with drug and medical supply companies. A larger pool also spreads risk, further minimizing the premiums paid for the overall pool versus small pockets of isolated groups of applicants. So while not the "silver bullet" of healthcare, the co-op instead should be viewed as a specialized "tool" to be applied for the right situation.
If people form their own insurance co-operatives, they have group buying power in a way a single person seeking to get insurance would not. These groups would be able to get the things they wanted, and work together (as opposed to a company making all of their decisions) to make sure that they receive exactly what they want from insurance coverage. Buying and bargaining in a group offers much more power than a single person could ever have, and the larger the group the more power they would have.
Although they are not widespread, health co-ops have provided people with economical health care coverage. One of the reasons they are more economical than traditional insurance is the profit element. A for-profit insurance company has less incentive to save their customers money, and more incentive to deny various procedures. A health co-op is non-profit, and thus, saves money by not looking for profit, as well as improving care.
Electric Co-ops are proof that co-ops are economical. Of all manners to receive electricity, Co-ops need the least government subsidy of all electrical providers, including private enterprise. They are owned and operated by the members who use their services and there for have their members and users as their primary concern.
Insurance companies and cooperatives are Ponzi schemes. Insurance, in all forms, only serves to drive up the overall cost of heath care. By controlling and setting prices on health care procedures and medications, they set up a system where individuals cannot afford to pay for health care themselves. This insures their necessity in our society. In addition to that, they are businesses and, as such, they require large amounts of money to maintain themselves, at a cost to the consumer.
Health insurance cooperatives are ideal to consumers who want to continue with risky health behaviors while being covered under affordable health care insurance. Consumers should spend more money on reducing health risks which will allow existing health insurance providers to offer affordable health coverage. Little thought goes into the reality of establishing business in this industry and being able to gain financial support in the process will be very difficult. Prevention is the best answer to the problem of expensive health care insurance, not cooperatives.
Insurance companies that are part of the same cooperative work together for the same goals: quality of care and cost of care. They agree together to set prices. To lower the cost of health insurance, there needs to be true competitiveness by allowing any insurance company in any state to compete for business. The consumer can then decide what company offers the best price for the services provided.
The benefit of health insurance cooperatives comes from the law of numbers. When risk is spread out over a large group, it diminishes. This will generally result in a lower out-of-pocket premium for the insured. The costs of the actual health care, however, do not decrease. Rates are generally negotiated with carriers, rather than coops, so the costs necessary for various procedures do not diminish.
A cooperative cannot afford coverage in the case of one member having a catastrophic illness or injury. Those types cannot be pre-screened out, and can occur at any time. There is no early warning sign for many devastating conditions. Appendicitis, Guilliam Barre, heart attacks, and some cancers can come on rapidly, without warning in otherwise healthy individuals. These conditions can require lengthy hospital stays and would easily bankrupt a cooperative. This would then leave all those in the cooperative on state aid or charity care, should they need assistance.
I think the answer to lowering health care costs is to eliminate insurance from the health care equation altogether. The main way an insurer or cooperative can lower costs is by refusing services or limiting the choice of services or providers. I often pay less when I pay for medical services outright, rather than through my insurance company.
You see it depends upon your age. In youth and middle ages of your life a health insurance policy is not an appropriate thing to have. It is best when you have your feet in grave, and you get ill occasionally. Then it certainly helps reducing the cost of health maintenance.