Sunday, September 27, 2009

It's the Profits, Stupid! Part deux

Picking up on whatever misguided ideas I may have had about taking the profits out of health insurance in a previous rant, and wondering what the federal government’s role could be in effecting such a thing, the natural thing to do may be to look for precedents and models in our history. Could there be some instance where the feds ever stepped in and authorized the formation of nonprofit consumer-controlled groups to take over the function of out-of-control profit-driven companies, giving us in effect, a “public option?”

I would submit that there is.

On June 26, 1934 U.S. unemployment stood at 22%, the Dust Bowl disaster had ravaged the Central Plains and President Franklin D. Roosevelt signed into law ”An Act to establish a Federal Credit Union System, to establish a further market for securities of the United States, and to make more available to people of small means credit for provident purposes through a national system of cooperative credit, thereby helping to stabilize the credit structure of the United States.”

For anyone seriously worried about what a public option in health insurance might do to our cherished capitalist system, please note that the rise of credit unions in this country did not cause the banking system to collapse and did not lead us right down that slippery slope to socialism. In fact, the credit union movement has quietly flourished for three quarters of a century and manages to thrive even during the ongoing global economic recession - and no taxpayer dollars have ever been used to bail out a credit union.

Credit Union deposits are backed by the National Credit Union Share Insurance Fund (NCUSIF) much the same way the Federal Deposit Insurance Corporation (FDIC) covers bank deposits. Apparently people have forgotten that the FDIC is a federally sponsored independent insurance company that protects profit-driven financial institutions against loss of profits. I’ve heard no one bother to mention this in any debate over a public option in health care. Rather, we are expected to swallow the lie that any federally sponsored insurance company is an unaffordable and ill-advised step on a slippery slope toward socialism! Apparently, this only applies to one that would protect our health rather than protecting corporate profits.

Congress authorized the NCUSIF in 1970 along with the National Credit Union Administration (NCUA), the independent management agency created by a law that then-President Richard M. Nixon signed. NCUSIF is a public option insurance resource funded completely by participating credit unions. At the end of 2007 the fund had a balance of $7.3 billion and insured nearly 87 million accounts at 5,036 federal credit unions and 3,065 state-chartered credit unions.

According to
“A credit union is a non-profit, cooperative financial institution owned and operated by its members. Organized to serve and democratically controlled, credit unions provide their members with a safe place to save and borrow at reasonable rates. Credit unions differ from banks and other for-profit financial institutions in that members of a credit union are also owners. The board of directors are elected in a democratic one person-one vote system regardless of the amount of money invested in the credit union. Not for profit, not for charity, but for service is a credit union motto. Since profit is not a motivation, interest rates have been historically favorable for consumers at credit unions compared to banks."
I do not understand why our esteemed leaders in the federal government are not looking into these established and successful ways that they provided a public option in finance as models for providing a public option in health care. The closest they have come is the lame concept of health insurance “coops” that would still just benefit the for-profit insurance companies. Coops would do little more than allow groups of individuals to band together to purchase coverage from existing companies at group rates comparable to employer provided policies.

If We the People are going to be required to carry health insurance, as proposed in the bills now under consideration, it is only right that we should be able to participate in a plan that differs from commercial insurance companies in that we may join together as plan members who are also owners of the insuring institution. Like credit unions, the board of directors for these institutions should be elected in a democratic one person-one vote system regardless of the amount of money invested in the plan.

Not for profit, not for charity, but for service should also be the motto of our public option health insurance system.

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