II 

111TH CONGRESS 

1ST SESSION S. 1165 

To promote the development of health care cooperatives that will help businesses to pool the health care purchasing power of employers, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 2, 2009 

Mr. FEINGOLD (for himself and Ms. COLLINS) introduced the following bill; 

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To promote the development of health care cooperatives that 

will help businesses to pool the health care purchasing 

power of employers, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Promoting Health 

5 Care Purchasing Cooperatives Act’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 


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1 (1) Health care spending in the United States 

2 has reached 16.2 percent of the Gross Domestic 

3 Product of the United States, yet over 46,000,000 

4 people remain uninsured. 

5 (2) After nearly a decade of manageable in6 creases in commercial insurance premiums, many 

7 employers are now faced with consecutive years of 

8 double-digit premium increases. 

9 (3) Purchasing cooperatives owned by partici10 pating businesses are a proven method of achieving 

11 the bargaining power necessary to manage the cost 

12 and quality of employer-sponsored health plans and 

13 other employee benefits. 

14 (4) The Employer Health Care Alliance Cooper15 ative has provided its members with health care pur16 chasing power through provider contracting, data 

17 collection, activities to enhance quality improvements 

18 in the health care community, and activities to pro19 mote employee health care consumerism. 

20 (5) According to the National Business Coali21 tion on Health, there are nearly 60 employer-led 

22 coalitions across the United States that collectively 

23 purchase health care, proactively challenge high 

24 costs and the inefficient delivery of health care, and 

25 share information on quality. These coalitions repVerDate Nov 24 2008 23:18 Jun 02, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1165.IS S1165

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1 resent more than 7,000 employers, and approxi2 mately 25,000,000 employees and their dependents. 

3 (b) PURPOSE.—It is the purpose of this Act to build 

4 off of successful local employer-led health insurance initia5 tives by improving the value of their employees’ health 

6 care. 

7 SEC. 3. GRANTS TO SELF INSURED BUSINESSES TO FORM 

8 HEALTH CARE COOPERATIVES. 

9 (a) AUTHORIZATION.—The Secretary of Health and 

10 Human Services (in this Act referred to as the ‘‘Sec11 retary’’), acting through the Director of the Agency for 

12 Healthcare Research and Quality, is authorized to award 

13 grants to eligible groups that meet the criteria described 

14 in subsection (d), for the development of health care pur15 chasing cooperatives. Such grants may be used to provide 

16 support for the professional staff of such cooperatives, and 

17 to obtain contracted services for planning, development, 

18 and implementation activities for establishing such health 

19 care purchasing cooperatives. 

20 (b) ELIGIBLE GROUP DEFINED.— 

21 (1) IN GENERAL.—In this section, the term ‘‘el22 igible group’’ means a consortium of 2 or more self23 insured employers, including agricultural producers, 

24 each of which are responsible for their own health 

25 insurance risk pool with respect to their employees. 


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1 (2) NO TRANSFER OF RISK.—Individual em2 ployers who are members of an eligible group may 

3 not transfer insurance risk to such group. 

4 (c) APPLICATION.—To be eligible to receive a grant 

5 under this section, an eligible group shall submit to the 

6 Secretary an application at such time, in such manner, 

7 and accompanied by such information as the Secretary 

8 may require. 

9 (d) CRITERIA.— 

10 (1) FEASIBILITY STUDY GRANTS.— 

11 (A) IN GENERAL.—An eligible group may 

12 submit an application under subsection (c) for 

13 a grant to conduct a feasibility study con14 cerning the establishment of a health insurance 

15 purchasing cooperative. The Secretary shall ap16 prove applications submitted under the pre17 ceding sentence if the study will consider the 

18 criteria described in paragraph (2). 

19 (B) REPORT.—After the completion of a 

20 feasibility study under a grant under this sec21 tion, an eligible group shall submit to the Sec22 retary a report describing the results of such 

23 study. 


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1 (2) GRANT CRITERIA.—The criteria described 

2 in this paragraph include the following with respect 

3 to the eligible group involved: 

4 (A) The ability of the group to effectively 

5 pool the health care purchasing power of em6 ployers. 

7 (B) The ability of the group to provide 

8 data to employers to enable such employers to 

9 make data-based decisions regarding their 

10 health plans. 

11 (C) The ability of the group to drive qual12 ity improvement in the health care community. 

13 (D) The ability of the group to promote 

14 health care consumerism through employee edu15 cation, self-care, and comparative provider per16 formance information. 

17 (E) The ability of the group to meet any 

18 other criteria determined appropriate by the 

19 Secretary. 

20 (e) COOPERATIVE GRANTS.—After the submission of 

21 a report by an eligible group under subsection (d)(1)(B), 

22 the Secretary shall determine whether to award the group 

23 a grant for the establishment of a cooperative under sub24 section (a). In making a determination under the preVerDate Nov 24 2008 23:18 Jun 02, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1165.IS S1165

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1 ceding sentence, the Secretary shall consider the criteria 

2 described in subsection (d)(2) with respect to the group. 

3 (f) COOPERATIVES.— 

4 (1) IN GENERAL.—An eligible group awarded a 

5 grant under subsection (a) shall establish or expand 

6 a health insurance purchasing cooperative that 

7 shall— 

8 (A) be a nonprofit organization; 

9 (B) be wholly owned, and democratically 

10 governed by its member-employers; 

11 (C) exist solely to serve the membership 

12 base; 

13 (D) be governed by a board of directors 

14 that is democratically elected by the cooperative 

15 membership using a 1-member, 1-vote standard; 

16 and 

17 (E) accept any new member in accordance 

18 with specific criteria, including a limitation on 

19 the number of members, determined by the Sec20 retary. 

21 (2) AUTHORIZED COOPERATIVE ACTIVITIES.—A 

22 cooperative established under paragraph (1) shall— 

23 (A) assist the members of the cooperative 

24 in pooling their health care insurance pur25 chasing power; 


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1 (B) provide data to improve the ability of 

2 the members of the cooperative to make data3 based decisions regarding their health plans; 

4 (C) conduct activities to enhance quality 

5 improvement in the health care community; 

6 (D) work to promote health care con7 sumerism through employee education, self8 care, and comparative provider performance in9 formation; and 

10 (E) conduct any other activities deter11 mined appropriate by the Secretary. 

12 (g) REVIEW.— 

13 (1) IN GENERAL.—Not later than 1 year after 

14 the date on which grants are awarded under this 

15 section, and every 2 years thereafter, the Secretary 

16 shall study the programs funded under the grants 

17 and submit to the appropriate committees of Con18 gress a report on the progress of such programs in 

19 improving the access of employees to quality, afford20 able health insurance. 

21 (2) SLIDING SCALE FUNDING.—The Secretary 

22 shall use the information included in the report sub23 mitted under paragraph (1) to establish a schedule 

24 for scaling back payments under this section with 

25 the goal of ensuring that programs funded with 


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1 grants under this section are self sufficient within 

2 10 years. 

3 SEC. 4. GRANTS TO SMALL BUSINESSES TO FORM HEALTH 

4 CARE COOPERATIVES. 

5 The Secretary shall carry out a grant program that 

6 is identical to the grant program provided for in section 

7 3, except that an eligible group for purposes of a grant 

8 under this section shall be a consortium of 2 or more em9 ployers, including agricultural producers, each of which— 

10 (1) have 99 employees or less; and 

11 (2) are purchasers of health insurance (are not 

12 self-insured) for their employees. 

13 SEC. 5. AUTHORIZATION OF APPROPRIATIONS. 

14 From the administrative funds provided to the Sec15 retary for each fiscal year, the Secretary may use not to 

16 exceed a total of $60,000,000 for fiscal years 2009 

17 through 2018 to carry out this Act. 

Æ 


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