THE TREATMENT OCTOBER 30, 2009
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Senator Ron Wyden has been promoting a universal health care plan for almost three years. And in the last few months, as it's become apparent that his plan wouldn't be the basis for final legislation, he's narrowed his cause to promoting one of its chief elements: "choice."
The idea works this way: Under the proposals moving through Congress, most people with access to employer-sponsored insurance would have to take it. Wyden wants to give these people an additional option: The ability to turn down that coverage, and then use their employers' contributions in order to purchase a policy through one of the new insurance exchanges--which, under current proposals, are being set up primarily for the self-employed and small businesses.
Like Wyden's original plan, the choice amendment has proven popular with experts and members of the media, including yours truly. And lately it's generated more interest on the left, since the amendment would--among other things--give everybody the right to enroll in the public insurance option, which will be operating inside the exchanges only. (Wyden, who sits on the Finance Committee, voted for the strong public option when it came up for considerations.)
But the staunch opposition of employers and unions, who for various reasons oppose any disruption of existing employment-based benefits, seems likely to block this effort as well.
That's left Wyden looking for a compromise--a measure that might at least put down some sort of marker. It looks like he may have found one.
Working with Senate Finance Chairman Max Baucus, who during the markup hearings pledged to assist in this endeavor, Wyden has devised a proposal that would open the exchanges to a narrow, but important group of people with job-based coverage.
Under the Finance bill's terms, people can already opt out of employer policies and use the exchanges--taking advantage of the government subsidies available there--if they can demonstrate that paying their share of premiums for an employer policy would cost more than 10 percent of their household income. At the same time, people who can demonstrate that paying for insurance would cost more than 8 percent of their household income are exempt from the individual mandate--that is, the requirement to buy insurance altogether.
As you can see, there's a gap there. If you work for a company that offers insurance, but the premiums would take between 8 and 10 percent of your income, then you would not be required to pay for that coverage--but, simultaneously, you wouldn't have access to the subsidies that might help you buy a different policy even if you wanted.
Wyden wants to let these people enroll in the exchanges--and take their employer contributions with them, to help pay for the coverage there. In effect, the employer contributions become their "subsidies." If they can find an exchange policy that costs less than their employer contribution, they can pocket the difference as cash.
Wyden has suggested that his proposal would accomplish several things at once. It'd give people more insurance options and, by encouraging them to shop around for the best buy, promote more competition among insurers. If this proposal went through, that's what would happen--at least for people who fall into that gap.
How many people is that? Wyden just received a formal estimate from the Congressional Budget Office. CBO examined two possible iterations of the proposal. Under the one most likely to pass--it's not worth going into why, at least right now--about a million people would end up taking advantage of the option. That's not a huge number, obviously, but it's enough for Wyden to put down his marker. And at $5 billion over ten years, it's very little money--a rounding error, really.
Like any such proposal, this one raises some tricky design issues. It'd have to be crafted carefully, to prevent employers and employees from gaming the system. But that seems doable--and, more important, this idea seems worth doing.
Note: For the record,there are better ways to deal with that gap. The real solution is to exempt fewer people from the individual mandate--by improving the subsidies, so that more people can afford to buy insurance. But if that were to happen--say, in conference committee--there's no reason this amendment, or some similar version, couldn't still be part of the final legislation.
9 comments
Even this is a pretty bad idea. For one, do you really think that employees are really going to go into the Human resources department and demand that their contribution be taken out of the companies negotiated risk pool, for the option of their going to some nebulous exchange in hope of getting a better rate? And you don't think that will have any negative impact on their job? It will certainly be a hell of a deterrent. I sure as hell wouldn't do it, no matter what the law says. And, of course, most everyday people aren't exactly going to be the smartest people in the world to be able to distinguish which is better, most likely only which is cheaper. Wow, just wow. Do any of these people have real world experience at a job, with real people? And this new plan sounds like a hell of a boondoggle. If I were an employer I would make damn sure that as many of my employees paid at least 8% of their income in health care as they can so they could then get the subsidies. And, in order to control them I could just make sure it is under 10%. I doubt the employees will care since it is free money or free health care on the taxpayers dime. And this is supposed to lower the cost of insurance? Exchanges for companies, or self-employed, yes. Opting out of your company plan, no.
- blackton
October 30, 2009 at 11:38am
I appreciate Wyden's effort and the appeal of "choice," but if this process of pursuing health care reform has taught us anything, it's that reform, or making any significant improvements to the system, is exceedingly difficult when there are so many different health care systems. For seniors, for children, for the poor, for union members, for federal employees, and on and on, each ever diligent in opposing anything that might jeopardize whatever advantage they may perceive for their particular system. So does creating even more systems move us forward or backward. I would say backward.
- raylward
October 30, 2009 at 1:18pm
Perhaps the footnote suggests a reason this mini-Wyden amendment may pass. It will provide a bit of cover for leaving the subsidies and mandates too limited. Still, if they are to remain too limited in any case, perhaps this narrow opt-in is a good thing.
- adsprung
October 30, 2009 at 1:53pm
This is always made so much more complicated than it needs to be. Merely institute a federal health care plan for all American citizens equal to the ones available for all federal government employees. Would could possibly be more democratic? Or more to the credit of an alleged democratic government? george
- iambiguous
October 31, 2009 at 1:50am
From AP----RICARDO ALONSO-ZALDIVAR [today] What's all the fuss about? After all the noise over Democrats' push for a government insurance plan to compete with private carriers, coverage numbers are finally in: Two percent. That's the estimated share of Americans younger than 65 who'd sign up for the public option plan under the health care bill that Speaker Nancy Pelosi, D-Calif., is steering toward House approval. The underwhelming statistic is raising questions about whether the government plan will be the iron-fisted competitor that private insurers warn will shut them down or a niche operator that becomes a haven for patients with health insurance horror stories. george: This sums up so eloquently what I have been pointing out for weeks now. That's how "democracy" unfolds in America when the stakes [$$$] are high. From Clinton and Obama squabbling over who would come closest to "universal health care" on the campaign trail to this "great debate" over whether those 2% would be included or not in the final bill. So I'll repeat myself: The Washington-Wall Street production of Healthcare Reform unfolds on its way to the inevitable denouement. Act I: On The Campaign Trail Obama and Clinton in a slugfest over who can insure the most people while slaying the greedy bastards in the healthcare industry once and for all Act II: Getting Started Obama wins. He insists that, Fox News notwithstanding, healthcare reform will be tackled and pinned to the mat by his administration before the year is out Act III: The Gang's All Here All the players in Washington and New York line up their checkbooks....and their IOUs...as the "haggling" begins Act IV: Stalking "The Great Compromise" Max Baucus is chosen as the point man in creating a bill that is exactly, uh, halfway brtween Main Street and Wall Street Act V: Closing In Inexorably the "fair and balanced" reform proposal wends its way towards Obama's desk as heroes and villians rise and fall Act VI: The Home Stretch Now we all sit back and wait to see just how many "progressive" changes are in the final bill Will this be yet another triumph for liberal socialism?! I can hear BeckWorld now: That 2% is just the socialists getting their foot in the door! george walton j
- iambiguous
October 31, 2009 at 7:47pm
Jonathan, Sometimes I wonder if you've had your head in this health care mess too long. Your efforts at balanced critique are hampered by your need to say something nice about everybody. Senator Wyden's mini-choice plan is simply nuts. I'm glad to see other comments pointing out the paperwork and inefficient convolutions that would be required by employee, employer and the feds to implement his plan. It would add further complications to cafeteria plans. I have often urged the visualization of policy proposals. How would Wyden "choice" affect real people? the single mother working at a meat-packing plant? Will she exercise her "choice" to take her money and decide on a CIGNA, or WellPoint plan, or the "competitive" public option---all of which may have high deductibles and co-pays. Having chosen a high deductible plan, will she then forgo visits to the doctor for preventive, even essential care for herself and her children? Might Senator Wyden's choice turn into Sophie's choice? Who will be sacrificed? We'll be back at square one. In your Note above, you say "The real solution is to exempt fewer people from the individual mandate--by improving the subsidies, so that more people can afford to buy insurance." How can you gloss over the fact that taxpayer-funded subsidies will be more gravy for the private insurers? I joined other single-payer activists who sat-in at HUMANA headquarters this week. While we slept overnite in the marble lobby, executives on the upper floors were gloating over their TRICARE win, designing lobbying and marketing strategies to hold on to the profit stream from Medicare Advantage plans, denying valid claims, and drooling over the prospect of government-mandated purchase of private plans. FamiliesUSA calls the new merged House bill "the gold standard." That's an apt description. Private insurers will be laughin' all the way to the bank. Our multi-payer system is a burden on employer, employee, and taxpayer; moreover, it is a drain on our economy. The much-vaunted "values" of competition and choice are not controlling costs, nor improving quality. Expanded and improved Medicare-for-all is the solution.
- hmseil01
November 1, 2009 at 1:39pm
hmsell01, Amen to that last paragraph. What looks to be shaping up as a "public option" that gets passed out of the Congress doesn't pass my smell test as all that "public" or much of an "option" either. My employer based plan ushered in HUMANA as the provider a little over a year ago and the quality stinks. I think Obama, Ried, Pelosi and other powerful Dems risk a backlash by handing citizens and activists such a weak bill. Most of my cohorts supported the idea of a public option with the basis that there would at least be a chance that we could have the choice of opting out of the increasingly low quality private plans that the likes of HUMANA sticks us with. If merely two percent of the population qualify for it, then by definition it's not at all "public" and most certainly not an "option" for those of us stuck having to put up with the likes of HUMANA, WELLPOINT, or UHC. I would also rather have Medicare-for-all, but I would have settled for individuals having the right to pay more for less if they really couldn't unglue themselves from the stupid idea that a government plan would kill them. Sadly, The White House and Congress have turned around and treated us as badly as the private insurers have. A terrible result in the end.
- fultimr
November 1, 2009 at 4:07pm
So, looks like the public option will stink. We'll have "reform" that makes a too-expensive and complex system only more so, albeit with some important tweaks. It's time to have the CBO vet Medicare for all - good coverage for us all - and see what it costs. Then so called fiscal conservatives could be quiet or just admit their first priority is the short term profits of the insurance industry.
- bsemple
November 1, 2009 at 11:22pm
By George, George has got it!
- blujay
November 2, 2009 at 10:06pm