The White House indicated it could jettison the contentious public option and settle on insurance cooperatives as an acceptable alternative, a move embraced by some Republicans lawmakers who have strongly opposed the administration's approach so far.
As proposed by [Sen. Kent Conrad, D-N.D.], the co-ops would receive federal startup money, but then would operate independently of the government. They would have to maintain the same financial reserves that private companies are required to keep to handle unexpectedly high claims.
Yes, the government plan is to pick someone to whom to give millions of dollars that they've taken away from other people. The theory behind this move is that the government can pick someone who can run an insurance company better than the people currently running insurance companies.
In actuality, the venture will fail, because the person will be chosen especially to make it fail. It will fail spectacularly, though, after spending all of its (taxpayer) money offering services no sane company would offer. It's specifically designed to do so. That way Democrats can claim short-term success ("Look at all the people we're treating!") and still blame the free market for when it fails ("We were doing so well before we ran out of money!"). This will give the Democrat very visible supporters, because the people that are treated by the co-op are, essentially, getting stuff for free, and everyone loves getting stuff for free. At the same time, people don't see that which is hidden. They see the benefits of spending the money in pursuit of impossibly unsustainable benefits, but they don't see the damage that taking those millions away from hard-working taxpayers does.
Any system that takes from Peter to give to Paul can always count on the support of Paul. Obama's protestations to the contrary notwithstanding, it's all about politics.