I’m not sold on the Conrad co-op health plan being pushed, but I do think it has potential and I’ll explain why. First, let me tell you about John Bogle.
John Bogle, now retired, is the founder and former CEO of what is now one of the largest investment firms in the country. In an industry that is overrun with greed and corruption, Bogle is one of the good guys. It’s hard to overstate his significance and his contributions to investors over the years. Quite frankly, he’s the shit.
Founded in 1975, today the Vanguard Group manages over $1 trillion dollars in assets. What has driven such massive growth is that Bogle was a visionary who recognized that most mutual funds have very high fees that eat into investor returns. What was even more amazing is that these other funds with the high fees produced bad returns that rarely could even beat the S&P 500. In short: people were getting ripped off.
What Bogle did was develop the first index fund—in this case, a fund that tracks the S&P 500. These funds are inexpensive and a better deal for a couple of reasons. One of them is important to our discussion and one isn’t. The unimportant reason is that they’re passively managed (minimal buying and selling of stocks in the fund) and don’t have a lot of expenses as a result. The important reason is that the Vanguard Group is owned by the investors/customers of the mutual funds.
Bogle has become so popular that he has even attracted a group of devotees known as the Bogleheads. This group of passionate advocates embrace Bogle’s investing philosophy and "spread the word." I wouldn’t say this group of loyal followers has had much to do with Vanguard’s huge success, but they have had some impact in recent years.
Vanguard has become so successful that other for-profit companies sell similar inexpensive mutual funds to their customers. But how can they make money off of those funds? Well, they don’t. Vanguard became such a force that other investment companies sell some of their products AT A LOSS. They do this as a marketing tool, hoping that customers will buy their other investment products. In short, Bogle has influenced the lives of investors that don’t even invest in Vanguard funds.
So, the obvious question is: Could something like this work with health insurance?
I don’t know. The two industries are world’s apart and I recognize that.
It would depend on how the co-op was set up.
But when I think of the Bogleheads, I think it might be able to work.
Here’s the thing. If I have the option to choose between a private plan and co-op plan, I buy the co-op plan. Period. Case closed. End of story. Why? Because I don’t believe profits should ever be given equal importance to health.
Even if I had to pay more, I’d buy the co-op plan. In fact, I’d be willing to voluntarily pay MORE than my cost if it meant we could bring more members into the fold, either through marketing or by subsidizing other members.
Hell, I’d slap a bumper sticker on my car that said: I PAID 110% FOR MY HEALTH INSURANCE. ASK ME HOW!
Not only would I buy that plan, but I’d encourage my friends and family to do the same. I’d show them the studies that explain that the more members we bring into the co-op, the cheaper the rates would be.
I’d show them that the CEO of their health insurance company is making $24 million dollars a year simply because people want the security of knowing they won’t die if they get sick. I’d mention how perverse that is. I’d ask them how much that pisses them off and if they wanted to do something about it.
That’s what I would do.
Would you?
Would Howard Dean?
Would the doctors and nurses in favor of a national health plan?
Would millions of others?
It could be one hell of a movement.
I know this all sounds pretty "pie in the sky." And I’m not naïve enough to ignore that this could just be an attempt to kill actual reform and jerk off the insurance industry. If it is, there’s no way in hell I’m going to support this proposal. Like I said, the devil is in the details. First, it must be a national co-op. And if taxpayers are subsidizing those who can’t afford insurance, as most proposals suggest, shouldn’t they be in the co-op plan? And wouldn’t that alone make it a force that has bargaining power?
I also think that the Republicans may have boxed themselves in a bit by drawing a line in the sand at "government involvement." If a non-profit co-op can be set up in such a way to actually compete with private plans, then their main sticking point has been defeated. Of course, they’ll still probably complain about something, but their arguments would ring hollow at that point. And they’ll be exposed as not negotiating in good faith.
In summary, I’m not sold on the co-op plan, but I’m willing to hear more.