KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Lawmakers Debate The Merits Of Cooperatives In Health Care

Legislators debate the merits of cooperatives as an alternative to the government-run public plan being advocated by some Democrats. Some point out that the rural electric co-ops, which were successful in bringing power to swaths of rural America, come at a high cost.

The Washington Post reports: "Sen. Kent Conrad (D-N.D.), a pivotal lawmaker in the health-care debate, wants to deliver coverage to the uninsured by starting up new cooperatives modeled on rural electric cooperatives that were founded during the Great Depression. But rural electric cooperatives have a mixed track record, experts say. They brought electricity to millions of rural Americans who lacked it in the 1930s and today serve about 14 percent of Americans. But after 75 years, the rural electric cooperatives still rely heavily on federal credit subsidies, have weak balance sheets and, some studies suggest, operate less efficiently than privately-owned utilities."

In recent years, some of these cooperatives have been criticized "for excessive payments to executives and for pushing forward with new coal-fired power plants at a time when many people concerned with climate change want to slow down or halt such plants. Yet they remain politically powerful through the National Rural Electric Cooperative Association" (Mufson, 8/27).

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