Conrad's Co-ops Plan Is Worthless

I previously wrote how you would be able to tell if Conrad's co-ops proposal is worthless. The point of the public plan is to provide strong competition for the for-profit health insurance companies. Competition would steal some of their customers and drive down their profit margins. Real competition would be bad for their corporate bottom line.

Yesterday, following reports that the Senate Finance Committee might embrace Conrad's co-ops as a replacement for the public option, stock prices of for-profit health insurance companies soared. From Reuters:

The S&P Managed Health Care index of large U.S. health insurers closed 6.5 percent higher.
Aetna rose 12.6 percent, Coventry was up 12.7 percent and Cigna was 7.7 percent higher, all on the New York Stock Exchange. Centene rose 7.9 percent.

It is clear that the people who have billions invested in health insurance believe that Conrad's idea of a loose association of co-ops simply will not provide strong competition. They believe it would not drive down the cost of premiums for average Americans and will not hurt the massive profits of the insurance companies. Wall Street has spoken, Conrad's “alternative” is worthless compared to a real public option.

Crossposted on The Walker Report

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