Oregon Senator Ron Wyden’s health plan is announced with a flourish and a call with a gaggle of bloggers. Best quick explanation is by Ezra
The bill is a replacement of employer-based health care with the purchase of individual insurance via regional pools, which look very like Clinton-style regional health alliances–except they’re now called “health help agencies”. No underwriting, guaranteed issue, community rating and an individual mandate with subsidies up to 400% of poverty and a minimum benefits package equivalent to the BCBS plan in the FEBHP. All very similar to Enthoven circa 1984
From the call. Some notes…
Wyden said that the Hillary bill was too big in 1994 and you can’t expect the Senate to consider a bill that has to be moved around in a wheelbarrow. His is “only” 160 odd pages.
Maggie Mahar asked if the plans just wouldn’t pay the providers for the cheapo plan way way less to the things they provide for the more expensive plans. Wyden says that there’ll be a “floor of decency,” and that all those commercial plans will pay a better rate than Medicare—so he sees the end of Medicaid and second class health care citizens. No global budgets, because the plan would reduce costs also be a slightly barer plans than some employers provide now. Cost reductions would come from increased competition as people trade down to less rich plans, and through reduced administrative costs—he has a Lewin report to prove it (something else that smacks of 1993!)
Max Sawicky asked whether relying on consumer choice and market competition to hold costs down will work. Here’s what Wyden said. From the first paycheck, employees will see the added health benefits in their paycheck right now, and they’d be required to go out and purchase the basic package. (It would be a wash from tax standpoint for now, as they’d get a new deduction). After the first two years, there’s no longer a requirement that employers would have to pay the salary “increase” but employers would keep the wages up because otherwise the good workers would leave. But after that every employer would be required to make a payment based on their size—and that tax would total more than $100bn) a year. He was asked if that looks like an extra tax which penalizes the employers who were already good citizens and were providing rich insurance already. His response was that overall employers will pay less because in the first two years, the employers will not pay for the growth in health care costs over those two years, they’d just pay the cash amount they were paying in Year Zero. (That does presumably mean that any cost increases will be paid by consumers). Employer wins on day 1 because they don’t pay the increase. Then in 2 years they pay the tax. …..but they haven’t quite figured out that transition for the employers that had very rich benefits. How do you have real consumer choice? How do you make a market? Right now we don’t have one—he thinks his transition will help it.
I asked, so if that works, how are you going to get the provider and supplier industry to not object with extreme prejudice? After all, if we’re going to spend less money they’ll be less industry income! His argument is that primary care docs are going to get a boost in reimbursement; there also be a boost in chronic care preventative spending (although to be honest I missed the details). The doctors will also be bought off with malpractice reforms and all doctors will get paid commercial rates for all patients. He didn’t mention anything about the rest of the industry beyond primary care docs. So I think that he knows he’s in for a big fight! And of course if the plans actually do compete on not increasing costs to consumers in years 1 & 2 with a fixed benefit package, by definition less money will be flowing providers’ way.
Wyden ends by saying that elected officials have been way too timid, and nothing much has happened about health care for far too long. He wants a specific bill to force the debate so that Presidential candidates will have to engage in the debate. And that I suspect is the point, although I fear that he’s 4 years too soon. (And of course given the condition of S. Dakota Dem Senator Tim Johnson, there may not even be a Democratically elected Senate to introduce the bill into!)