This approach is one possible option which would maintain a market based system in relation to private coverage, but allow essentially collective bargaining based on volume of potential subscribers.  We continue to think that an individual mandate is the way to go with mandatory acceptance by insurers and a minimum defined base of benefits . . . obi jo

More than 12 million people could ultimately buy insurance under a co-op-styled structure, which would make it the nation’s third-largest provider of health insurance and give it enough clout to drive down costs of other private payers, according to one of its architects, Sen. Kent Conrad (D-N.D.).

Under such a structure, groups could bond together to build a critical mass of people, who would then collectively bargain with insurance companies for lower premiums and more benefits. Conrad said the proposal would give states wide berth to join together, as well.

The measure would require an upfront federal investment of $6 billion, which would be part of a financial reserve. An interim board would also be appointed by HHS and would be charged with setting policy and actuarial values.

Conrad detailed the plan before going into a negotiating session with a small, bipartisan group of Senate Finance Committee members. The committee is strongly leaning toward adopting co-ops instead of a public health plan, which Republicans have railed against.  Conrad said that to be actuarially sound, a co-op would need at least 25,000 people to join, but would need considerably more, roughly 500,000, to have strong negotiating powers. More than 40 million people are expected to gain coverage under a reformed health system, he said.

Lawmaker outlines structure of co-op system – http://www.modernhealthcare.com/article/20090728/REG/307289944/-1