I stumbled onto this item from the CNN website about co-ops. Of course we already more or less know that they simply won't be as effective as the public option in terms of insuring everyone and keeping costs down.
What you might not know is that there are already some co-ops set up in various cities. Here are some (paraphrased) firsthand warning signs -- most of which stem from the fact that they're poorly funded and too small:
1) They often refuse people with pre-existing conditions.
2) Some co-op premiums are unaffordable.
3) If a co-op premium is too expensive for many families to enroll, then the co-op is made weaker in terms of its size and, therefore, its leverage and efficacy. In other words, it's kind of screwed on both ends. The government would have to expand its subsidies, which then begs the question: if the government is spending money, why not spend it on subsidizing premiums for a public insurance plan which actually reduces costs/deficits more effectively over time. I guess that makes too much sense.
4) Private insurers often have "most favored nation" clauses in their contracts with healthcare providers which would prevent co-ops from using those providers within its system (the public option, with the force of the government, could possibly break through such restrictions).
Fortunately, I'm still not convinced that co-ops will actually happen. Despite the fact that he didn't draw a "line in the sand," the president pitched the public option for seven whole paragraphs last night. Co-ops got 12 words. That says a lot.