Star City Harbinger » Could it come down to co-ops? Are health ...

.  In fact, the charters of just about every American cooperative contain prohibitions against members of government participating in leadership roles.  A co-op is a wholly private affair for the public good.

Title One, Subtitle E of America’s Healthy Future Act sets about the ambitious task of putting to paper what has been a relatively amorphous idea since it was first bandied about earlier in the summer.  In the subsection , the Senate Finance Committee lays out an appropriation regime amounting to approximately $6 billion for a Consumer Operated and Oriented Plan (Co-op) “to foster the creation of non-profit, member-run health insurance companies that serve individuals in one or more states.”  The monies would be dispersed in the form of federal loans and grants for start-up costs and to plug state budgets.

Right now, insurance companies that provide health insurance are subject to federal taxes either like life insurance companies or property insurance companies.  For those health insurance companies that operate like life insurance companies, taxable income amounts to the difference between collection of premiums and pay-outs.  Health insurance companies that function like property or casualty insurance firms determine their taxable income from underwriting income (premiums) and investment income minus allowable deductions, like expenses.  The incentive is to actually increase costs to lower the company’s tax burden.

Presently, some fraternal societies, like the the Benevolent Order of Police for example, that provide health and life insurance for their members can qualify for tax exempt status under 501(c)(8).

Under the Healthy Futures Act , health care cooperatives would receive tax exemptions similar to those businesses that qualify under 501(a) and 501(c)(8) of the federal tax code.

Essentially, the health care cooperative plan in the Senate Finance Committee bill would incentivize the creation of more health providers like the ones working in Germany at the moment :

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