The Obama administration’s apparent willingness to withdraw its insistence on a government-run health insurance plan is not only the right move but may ultimately prove to be the single thing that jumpstarts actual health care reform. It’s time now for the health insurance industry, which has been admirably quiet to this point, to come forward and reinforce its genuine interest in cooperating on mutually agreeable and amenable reform initiatives. The industry needs to try to ensure that the more liberal wing of the Democratic Party doesn’t succeed in once again making the “public option” mandatory.

Replacing a government-run public plan with regional co-ops certainly should be a more palatable idea for the majority of the president’s opponents and coalitions of currently self-insured corporations that might be willing to be the “lead tenants” of new, member-owned not-for-profit health plans. In addition, a substantial number of the existing 1,300 or so commercial insurers are already not-for-profit, including many of the most powerful. Adding a series of regional non-profit cooperatives that would have to play by the same rules as private health plans isn’t a drastic departure. And it would spur the competition the president desperately seeks to “keep insurance companies honest” (although my experience would suggest that their executives are at least as honest as anyone in our society). We should all note that the insurance industry has long endorsed the notion of doing away with pre-existing conditions restrictions and age- and gender-based pricing as long as there is an enforceable mandate that everyone in the U.S. must have basic health insurance. 

With the public plan option slipping off the table, I think we’ll see an even greater spirit of cooperation than we may have anticipated just a few short days ago.