Beware a Health Care Fannie Mae

This is from the Wall Street Journal:

The details of the Senate Finance Committee's hush-hush health talks aren't fully known, but leaks suggest that one all-but-certain highlight will be new federally created health "cooperatives" to compete against private insurers… All of which makes these co-ops sound a lot like a health-care Fannie Mae and Freddie Mac, which Congress created because there was supposedly no secondary mortgage market. The duo proceeded to use their government subsidy to dominate the market and drive out private competitors.

Comments (6)

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  1. Juan O. says:

    That’s all we need is FANNIE MED to fix our health care system.

  2. Devon Herrick says:

    There are very few examples of these so-called health care cooperatives — none of which are big enough to illustrate how such an entity could operate successfully on a large scale. Liberals believe they can create nonprofit entities that will avoid all the alleged sins of the marketplace. Yet, the old complaints persist — including the fact that firms that do not break on a consistent basis will eventually cease to exist. Thus, these cooperatives will act just like for-profit entities and liberals will still be dissatisfied.

  3. Bart Ingles says:

    Health co-ops are just a magic bullet. Like Einstein’s cosmological constant– just a hypothetical value chosen because it fills the gaps in the favored theory.

    Hush-hush because nobody knows exactly what they’re supposed to do or how to make them work.

    Now that we’ve commissioned and built the starship, all we need is to invent the warp drive.

  4. John R. Graham says:

    If you want to start a co-op, then go ahead and start one! I was disturbed to learn that the Green Bay (WI) co-op actually did receive a healthy dose of federal money when it started up, so it’s not surprising they’d host President Obama.

    In the 1930s the Blues started because commercial insurers did not think that they could manage adverse selection of comprehensive health insurance. They soon learned that they could. While some argue that they succeeded through risk selection, it is also the case that medical costs are so high now that it would be very difficult to back them up solely with non-profit insurers. The conversions happened because non-profits needed access to the capital markets (and they had to disgorge much of their retained earnings to do so).

  5. Michael Kirsch, M.D. says:

    While I don’t have the economics backround to weigh in fully, this skeptical physician prefers any ‘option’ that’s not the public option, which is an obvious Trojan Horse that will over time trample over the private carriers. By the time I bone up and learn the ins and outs of co-ops, this option will probably have been passed over. As a doctor who treats living breathing human beings, I am dismayed that that vast bulk of what I read about health care reform is based on costs. Medical quality is not a governmental priority. It seems to many of us that the government and others are shooting for more access and cost control in exchange for medical mediocrity.

  6. Hal says:

    This is indeed troubling to me. I saw the numbers that half the US mortgages would be upside down/underwater come next year and then this. My plan for myself is to get out of debt asap and put my cash into something that will hold wealth. I’m thinking precious metals and see this morning looking at the exactprice widget ( ) that gold and silver are trading well. Maybe real estate if I can find it cheap enough and have the opportunity to buy out right. The jobs numbers may be good that they released today but once it get’s digested and we realize that there is something like 14.5 million people out of work still, what will that do to the housing market and healthcare system? And when you look at how the government is handling Medicare and Fannie and Freddie you know that the job they will do on national health care system will be overly burdensome and costly.

    Time will tell.