Co-ops a federal-subsidy trough

(By Ed Morrissey, Hot Air) - With the public plan in ObamaCare attracting enough heat to melt steel girders, some moderates in the Senate have proposed replacing it with health insurance co-operatives. The idea dates back several decades and was instrumental in FDR’s program of modernizing energy distribution in rural areas, and Kent Conrad (D-ND) says that example should light the way for an overhaul of the health-care system as well. However, as the Washington Post reports, the track record of those co-operatives hardly gives confidence that they’ll work as intended or prevent government control of health care as a result:

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.

Over the past three years, some rural electric cooperatives have also come under criticism 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.