Ezra write about the co-op part of the Baucus plan, the idea that every state should have a co-operative health care provider. That sounds a little bit like a public option in disguise, but it is not. It's a band-aid added to one of those many, many sores our current health care system has. Ezra:
The co-ops can only compete in the small group and individual markets. That is to say, if the co-ops prove effective, and The Washington Post would like to offer co-op coverage as an option to its workers, it can't. The co-ops are not allowed to contract with large employers, which is to say, they can't compete with private insurers in the largest market, and they can't get the purchasing power that would come from a serious foothold among corporate customers.
Note that excluding the co-ops from the large employers means that they don't get as good risk spreading as the already-existing firms which are allowed to sell to large firms, small firms and individuals. Note, also, that writing one policy for 10,000 people is a lot cheaper, per policy, than writing a separate policy for each individual policy applicant. Finally, it's likely that the average risk is higher in the individual policy market, because if you are not well enough to work that's the one market you can still go for a policy (unless you are covered by some existing government program).
For all these reasons the co-ops have several strikes against them even before they are created. It's like putting a band-aid on something that really needs draining and antibiotics.