It's been some time since I've run across a genuinely new health care proposal, but the comprehensive reform legislation Ron Wyden's unveiled today is just such a beast. Wyden, a gangly goofball of a Senator who last turned heads for his tax reform ideas, must have decided fully restructuring the tax code was thinking too small, so this morning, he took over the Senate Finance Committee's hearing room, brought in an array of union leaders, CEOs, and health wonks, and argued to totally scrap the employer-based health system.
Here's how it would work: The Healthy Americans Act of 2007 would begin by dissolving all employer-based insurance. Instead, it would mandate that every employer who had covered his employees in 2006 convert the total they spent on insurance into salary increases creating, in one day, the single largest pay raise America has ever seen. Now, why would employers go along with that? Well, legislatively they'd have to, but, as Len Nichols explained to me, they'll also want to: Health costs are accelerating, every year costs 10 or so percent more than they ear before. By freezing the total at what employers paid in 2006, Wyden's plan would exempt them from 2007's increase.
Meanwhile, an individual mandate would be implemented, forcing every American to purchase one of the options offered by their state's newly formed Health Help Agency (HHA). The HHA's will have a menu of private insurance plans, all of which must provide coverage equal to or better than the Blue Cross Blue Shield Standard Plan used by Congress. All plans will be community rated by the state, meaning an end to adverse selection and preexisting condition problems. The only acceptable variables for price will be geography, family size, and smoking status. Subsidies will be offered up to 400 percent of the poverty line, will full coverage provided to those below 100 percent. Employers will contribute through a set equation related to business size and yearly profits. There's quite a bit more, but that's the basic outline.
I have to spend some more time with the legislation ("c'mon baby, open up to me, tell me your secrets..."), but my snap reaction is heavily favorable. It isn't everything I'd want, but imposing the combination of community rating and an insurance floor will be a huge step forward. The cost stability offered to employers seems very, very savvy, as does the forced conversion of 2006 health costs into salary increases. The Lewin Group, the gold standard in health care actuarial data (I can't believe I just wrote that sentence), has evaluated the plan. Their conclusion? The plan would cover more than 99 percent of Americans, we'd save $4.8 billion in the first year and $1.48 trillion over the next decade. How's that sound? To me, it sounds like precisely the sort of big thinking Democrats need to be doing now that they're back in the majority.
For those want to dive in, there are more materials at Wyden HQ.
