The Wyden Amendment

I’ve had a number of requests to weigh in on the Wyden Amendment, which, of course, is based on the Wyden-Bennett Bill. If you asked me six months ago whether we would have been talking about this, I would have answered with a resounding, “No!”  Shows how predictable this whole process has been.

Basically, “The Free Choice Proposal” (as it is known) offers the following provisions:

1) Employers that offer group health coverage must offer the equivalent of a minimum benefit plan, contribute at least 70% of the premium, and offer at least one other health plan of greater actuarial value; or

2) Employers that do not offer the choice of a low cost option must offer workers a voucher worth at least 70% of the average of the three lowest cost plans in the change; or

3) With an adequate transition, employers can take their entire group to the exchange where they would receive a group discount so long as they provide at least 70% of the cost of average of the three lowest cost plans in the exchange; or

4) Employers that do not offer health insurance choices, a voucher, or go to the exchange, would have to pay a “fair share” fee which would be a percent of the national average of the three lowest cost plans in each state.

In essence, there will be an individual mandate.  Employers will either have to offer at least two options to their employees and pay a large chunk of premiums, or give them a voucher to help them buy insurance on the exchange.  The major difference between this and all the other bills, it that it will likely result in a lot of people (if not everyone) getting their insurance through the exchange.  HR3200, and the HELP bill, actually prohibit many employers from going to the exchange.  President Obama, and many others, have been so intent on keeping the employer based system in place, that this likely scares them.

Some have argued that this could lead to a fractured risk pool.  Senator Wyden counters this with a national reinsurance pool to protect those whose costs are higher than expected.  This is accompanied by provisions already in Senator Baucus’ bill that perform risk adjustments.

On the other hand, this bill has been scored amazingly well by the CBO.  And – shockingly -the bill itself has a number of Republican co-sponsors.  It also has the support of a number of knowledgeable people all over the ideological spectrum.

If you want my opinion, here it is.  I’d feel better about it with the addition of a public option, but if you think that the competition provided by the insurance exchange is a good thing, then letting everyone in is even better.  This would do more to contain costs than anything else I’ve yet seen. The difference is that a single-payer system might contain costs by providing less money to the system overall, ideally leading to a wider discussion of how and what we want to pay for.  This plan, on the other hand, controls costs by putting the incentives on individuals to buy less.  I think the better way to reduce costs is at the provider end, not the patient end.

But I live in the real world.  I recognize that those opposed to a single payer plan fear that my preferred method would result in rationing, instead of rational decisions about the use of more cost-effective treatments that I think could occur.  I also recognize that they think incentivizing consumers will result in better shopping and price reductions without negative health consequences, instead of the forgoing of needed care that I fear might occur.

I believe the evidence shows I’m right, but smart people I respect disagree.  I also acknowledge that we can fix things down the road if they don’t work out as we hope, as nothing is forever.  Therefore, although I would prefer a single payer plan, I recognize that Senator Wyden’s amendment would at least start to contain costs while still achieving the major goals of reform.  Senator Baucus’ bill is better with it than without it.

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