Time to Revisit Wyden-Bennett?

Roger collier

With the Washington insiders at politico.com
reporting this weekend that health care reform appears to be in “real
jeopardy,” and the Senate Finance Committee so uneasy that they have
decided to delay reform bill markup until after the July Fourth recess,
it’s increasingly clear that an approach of layering more and more
fixes onto the present system isn’t going to work. 

In a previous post, I suggested that
reform should be guided by seven principles: 

  1. Affordable basic benefits
  2. Fairness of tax treatment
  3. Price competition without
    “cherry picking”
  4. Individual choice, individual
    payment responsibility
  5. Restrictions on monopolies
  6. Funding
  7. Freedom from politics


With these as a starting point, this
may be a good time to look again at Senators Wyden and Bennett’s Healthy
Americans’ Act. 

The Wyden-Bennett bill is unique in
two respects: it is co-sponsored by Democrats and Republicans, and it
doesn’t assume that major changes can’t be made to our present way
of financing health care.  

The bill doesn’t completely match
the seven principles, but it does some notable things: 

  1. It establishes community
    rated basic benefits, with a ban on medical underwriting.
  2. It levels the playing field
    for all Americans by eliminating the tax exemption for employer-paid
  3. It moves the responsibility
    for choosing—and paying for—coverage to those who will use the care,
    but provides subsidies for the lower-income, as well as tax deductions
    to offset premium costs
  4. It provides real competition
    among insurance plans, including plans offered by employers, and specifically
    bans insurer “cherry picking” of the best risks.
  5. It mandates universal coverage,
    while limiting taxpayers’ liability.
  6. It changes Medicaid into
    a wrap-around program accessing the same insurers as other individuals,
    potentially reducing some of the financial burden on states, and eliminating
    the “Medicaid program stigma.”


The bill is not beyond criticism, but
anyone reading Senator Wyden’s speech on the Senate floor this past
week [http://wyden.senate.gov/newsroom/record.cfm?id=314529], on the challenges of health care reform,
will be struck with how much closer he seems to be to addressing the
key issues than the proposals that have been emerging from various congressional
committees over the past month.   

Roger Collier was formerly
CEO of a national health care consulting firm. His experience includes
the design and implementation of innovative health care programs for
HMOs, health insurers, and state and federal agencies.
He is editor of Health

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8 replies »

  1. As of today, I can’t think of a better time to revisit the Healthy Americans Act. Call your representative and insist that this gets its hearing in committee. I did.

  2. More like time to revisit single-payer health care. The one aspect I liked about the Obama house bill was the public option. For too long, we’ve been between a rock and a hard place: We can live without health insurance, or we can buy it from companies that collude to fix prices and rig public policy against us. I’m sick and tired of feeding the beast and this Wyden-Bennett bill just feeds the beast by mandating everyone into buying it.
    We will indeed live in a plutocracy when we’re required by law to buy insurance from corporations who turn around and use it to finance campaigns against the public interest.
    I’m one of the Americans who opposes the Democrats’ bill, in its current state, because it simply expands the morally bankrupt system of private insurance. To the extent the bill grows the private insurance system, I’m against it.

  3. As always, tcoyote has wise and knowledgeable comments. However, W-B’s simplicity and willingness to depart from the conventional Washington approach of ever-more band-aids layered on top of our present system makes it a better starting point than other approaches. So a few comments:
    1. Perhaps the standard benefit could be a litle less than FEHBP — gee, maybe Congress could reduce their own benefits!
    2. Wyden-Bennett does not end health insurance — though it does move it a little in the direction of the excellent Dutch system.
    3. Like it or not, employers are going to have to pay something, and a graduated levy on everyone is a lot less dangerous than play-or-pay (which could result in a real rush to the exits in hard times).
    Bottom line is, we can’t afford the other alternatives — and someone has to pay for health insurance. W-B at least gives us a simple template that can be readily tweaked.

  4. @MarkS:
    “Medicare is actually a good system.” Yeah, well except for the $35 trillion (with a T) in unfunded liabilities that politicians have piled up and the fact that its costs are artificially low due to provider cost controls that have the effect of making medical care for the rest of us all that much more expensive. Oh, and Medicare Part A goes bust in 7 years.
    Other than that, it’s a good system.

  5. Wyden Bennett would override state level mandates, but set a very rich benefit package as the national standard. It also takes the employer based coverage feature out of private insurance. When you strip off the free market trappings, however, it imposes a steep payroll tax on employers as a maintenance-of-effort provision (so you don’t need a big general tax increase to pay for the voucher everyone gets) and it basically ends health insurance by imposing extremely strict controls on underwriting, profits and everything else.
    For the same reason as play-or-pay, the payroll tax is a serious threat to any meaningful recovery, since the last thing you do if you want employers to start hiring again is to impose a steep tax on the newly hired workers.
    It’s worth a look, but when you look at the basic structure (which is really very simple), it’s a full-on federalization of the health insurance market, which will disturb a lot of Republicans as much as the loss of tax exemptions will disturb Democrats. The virtue of Wyden Bennet is its simplicity. And it makes a profit for the federal government in its first full year of implementation. Baucus is scared of Wyden Bennett and it is simply a non-starter in the House. Don’t hold your breath.
    It’s too simple . . .

  6. The mantra of ‘individual choice’ is music to the ears of conservatives but death to providing universal health care.
    When I am healthy and I want my freedom to choose to have no insurance or a very minimal free market offered policy but when I get sick I want my freedom to have maximum health insurance coverage. Do you see a problem here?
    We need universal coverage financed broadly (such as by a payroll tax) and have a single payer administrator, not a private company that will make a profit out of denying payment.
    We don’t need insurance companies. They created the current dysfunctional system.
    Medicare is actually a good system. Everyone is covered and it is financed by a payroll tax. Claims are administered fairly. It has much lower costs since they don’t pay commissions on policies and don’t pay bonuses to executives and profits to shareholders. It could lower costs more by applying sound ‘best practices’ to unnecessary care.
    Just make everyone eligible for Medicare and you have the problem solved.

  7. What will happen to the individual state mandates to cover certain procedures and services under the Wyden plan? For example, the state of CT has certain mandates to assure coverage for certain conditions such as autism, Lyme disease, etc? What will happen to them?
    I hear them say an individual would be able buy only the type of coverage they will use but how do they know what services and procedures they they will NEED? Also, if a consumer were to purchase coverage for procedures and services they may never use, well, how could that possibly cost the system more? How does it cost an HMO more to cover someone for something they never use? Are costs tied to claims loss? I saw an example on how it’s a shame that men have to pay more in an individual insurance policy for pregnancy coverage? Um, they’d never use it so how does it cost more money since no claims would ever be paid out? How could that possibly be?
    This Wyden thing seems like the HMO/Republican backed McCain plan that overrides state mandates but with lipstick on it. I think the Dems will catch on real quick to the scam and spit it out.

  8. Without the wildcard of Ted Kennedy in the Senate and polling data showing that the American public being increasingly concerned about the size of the deficit (and they damn well should be), the Wyden-Bennett Bill is still is the likely best of the flawed attempts at seriously having a shot to reforming healthcare this year.
    Basically Obama’s window here is until the fall and then it will close toward the end of this year as Congress/policy makers realize that the “green shoots” that keep getting mentioned by Bernanke and Geithner still will mean record unemployment (highest since the end of WWII in 2010), a stalled housing market, a dollar that continues to get beat like a drum on the exchange market, and a skiddish bond market.