Wyden-Bennett is dead, long live Wyden-Bennett
As readers of my other blog know, I’ve been a long-time proponent of the excellent health care reform bill introduced by Senator Ron Wyden of Oregon and Senator Bob Bennett of Utah, the Healthy Americans Act. It’s a smart, fiscally sound bill with bi-partisan support. Estimates place the total number of citizens covered under the bill at over 99% which is better than anything being discussed in Congress today.
In Congress, however, we get bad compromises, not good ones, which is why we have the Baucus bill, which is neither as cost-effective, as close to universal coverage, or as fundamentally game-changing as Wyden-Bennett. Indeed, there is little to be enthusiastic about in the Baucus plan, which jealously protects the anti-competitive status-quo from any real changes, and thus – despite any analysis the CBO might put forth – does very little to challenge the fundamental problems which have led to such staggering health care cost increases in the United States.
There was, however, still a chance that the Baucus bill could be amended to bring more competition and cost-savings on board, and once again it’s the incorrigible Senator from Oregon, Ron Wyden, who introduced the Free Choice Act in the Senate Finance Committee. Basically Wyden’s proposal would open up the new health care exchanges to everybody no matter their employer’s coverage and no matter the size of their business.
This follows two very basic rules of insurance and markets: first, the larger the cost sharing pool the cheaper the coverage; and second, more competition leads to better quality with a lower price-tag. The entire concept centers around choice, which is in short order under the current Senate proposal, as illustrated by Ezra Klein:
Under the Free Choice Act, there would only be one column. Everyone would have a choice – something the President has been promising, but which Congress seems hell-bent on opposing.
And, since both big labor and big business opposed this amendment, and since the chair of the Finance Committee, Max Baucus, is deeply in the pockets of both those constituencies as well as the health insurance lobby, Wyden’s proposal wasn’t even given the chance to go up for a vote. It was ruled out of order on a technicality and scrapped.
It doesn’t look like Wyden is down for the count just yet, though. According to ABC, the Democratic leadership sent a memo out to their Caucus members which stated, in part:
- Under our plan, if you like what you have you can keep it, but if you don’t there will be affordable choices for you that can’t be taken away.
Wyden’s communication director Jen Hoelzer shot back, making sure to hit “Reply to all”:
I just wanted to flag for colleagues that their bosses should be careful using the talking point that under the Dem bill, Americans who don’t like the coverage they have, will be able to choose something else.
As CBO Director Elmendorf indicated last week, under the current legislation, seven years after implementation, more than 90 percent of Americans will remain barred from shopping for insurance in the exchange. This means that not only will MOST Americans be stuck with the coverage they have – whether they like it or not – if reform establishes a public option, more than 90 percent of Americans won’t be able to choose it. As many of you know, this is why Senator Wyden has been fighting so hard to get his Free Choose proposal into the bill, so that we can tell our constituents that if you don’t like the coverage they have, they can choose something better. But right now, that’s not the case.
Let me know if you have any questions.
Jen
This may not make too many Democrats happy, of course. But what it does show is that Ron Wyden is more concerned about the American people than he is about loyalty to his party – a good, if rare, quality in any politician. More people need to understand why the free choice he’s proposing will be good for them, give them more choice and better health coverage, and ultimately save a great deal of money.
I remain cautiously optimistic.
Update.
Looks like Rich Ungar beat me to the punch on this one. While Rick and I obviously don’t share a lot of politics in common – he’d prefer single-payer, I’d prefer a more market-oriented approach – we both like the Free Choice Act. That’s the remarkable thing about both this act and the Wyden-Bennett bill that came before it. Wonks and policy types from across the political spectrum loved it, or at least liked it a lot more than anything else on the table.
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I like Wyden, and perhaps his Free Choice Act will make it into the final bill. I, too, am cautiously optimistic.
http://www.thehamandlegsshow.com
Erik-
Not entirely accurate that I favor single-payer. I do believe that, whether we like it or not, the U.S. is headed towards single-payer in the next decade or so. I recognize that, culturally, we are likely not ready for this. I also recognize the ‘downsides’ of single-payer, just as there are downsides to the current approach.
I have voiced strong objection to the problems of a market-oriented approach when the market ‘cheats’. Health care is a different product than other goods and services sold through the free market. No society can really afford a free market system where the health and safety of its citizens are risked in order to boost profits. (And I’m certainly not against profits.) I do feel that this has been happening.
Were it possible to regulate health insurers to the point where they could still make a profit while behaving in a way that does not harm their customers, I’d be with you all the way. The reality of American politics prohibits this. Thus, we are left to find another way.
I do, however, agree with you that Wyden’s approach is intelligent, questions a status quo that was never the result of policy planning but rather an accident of the times, and should be getting much more attention.
Sorry for any misrepresentation, Rick. I got the impression you were in favor of single-payer. I certainly agree the status-quo is unacceptable, and that the political climate makes smart reforms very difficult. Thus the non-starter that was Wyden-Bennett. It’s amazing to see all the very smart people writing about Wyden-Bennett and how fantastic it is, and then see almost no movement, no reaction, from the political class. Sad, really.
In response to another comment. See in context »I think we can lay this at the feet of the health care industry for whom such a wholesale change in how insurance is sold would be disruptive, to say the least.
In response to another comment. See in context »[...] Knapp | Wednesday, October 21, 2009 On his new policy blog at True/Slant, E.D. Kain provides a good defense of the Wyden-Bennett Act. In Congress, however, we get bad compromises, not good ones, which is why [...]
I am not a well educated man. I have worked in the construction industry most of my adult life. I can’t recommend it to others.
Why? Too MUCH competition. In my area of the country most if not all jobs go to the lowest bidder. Then owners complain about the quality of the work they receive.
I would love to see the cost of health care come down. It is ridiculous that we, as a nation, pay nearly twice the amount the rest of the world pays (for care that has been ranked 37th) But my own experiences teach me that when competition becomes too large a factor in the equation, then overall quality suffers. People cheat, unfortunate but true.
I don’t see an easy answer. I don’t think what is coming down the pike is going to lower rates, it will probably raise them, and that is unfortunate. I simply feel that the “business model” that works in the free market system as a whole just won’t work for health care.
After reading other comments on other articles I became interested in the system used in New Zealand. I don’t think it is politically possible here, but it has a lot going for it in my mind.
Just my two cents.
I don’t know. Is the quality of construction over all lower than it was fifty years ago? If so is this due to more competition, or to more demand for low-cost construction? In other words, is it possible that as more people have become able to afford things like houses – due largely to cheaper housing costs – has the quality gone down to fit that price only in that price-range, while higher priced construction (once the norm) has remained high quality? I’d be interested to see numbers, though I bet they’d be hard to come by.
In response to another comment. See in context »Hey guys,
I too think Wyden-Bennett is the preferable plan, but I think it’s too much of seismic shift for the American public to get behind it.
However, I’ve publicly stated my support in the following post…
To Dream The (Im)Possible Health Care Reform Dream: http://ow.ly/vMsI
Justin – I remember that post. That was good stuff, and not just because I’m quoted either
I wonder though, is it too much of a seismic shift for the American public, or too much of a seismic shift for the political class?
In response to another comment. See in context »Definitely a shift for the American public, and therefore it then becomes that for the politicians. But politicians usually don’t care until the public cares because they have to focus their energies of the issues that will win the most votes. At least that’s what the cynical side of me says.
And that’s probably why you haven’t seen Republicans proposing this legislation although it would make a TON of sense and is vastly more bipartisan than the current legislation. Instead they’re pretty much only offering opposition. A shame, but there it is.
In response to another comment. See in context »One issue with allowing everyone to opt into the public option is the dramatic increase in premiums for small businesses who would lose employees to the public option.
A few years ago I worked for a small firm. We had 10 people (some with family plans) on our health insurance plan. Two employees were considering the family plan offered by our employer, but declined because they had better options elsewhere. Their decisions to not go with our plan increased my monthly premium (single coverage) from $250 to $500. This is a ridiculous increase; the insurer doesn’t spread its risk over our 10/12 employees but over the 500,000 (or whatever) people insured in our state. But they charged us as if they were only insuring the 10 of us.
I am sure that one of the reasons for the big increase is that the insurance broker is paid a large commission for “selling” our account. A few employees more or less can make a big difference in whether that commission (plus the insurer’s other costs and profits) is fully covered by our premiums.
As with the subprime mortgage mess, a lot of the problem with our insurance industry has to do with the fact that the principal (the bank, the insurance company) doesn’t pay employees to sell the product (mortgage, insurance plan) to the end customer, but pays a large commission to someone with no skin in the game.
(As a side note, the insurance broker for my firm actually told us that we would have certain coverage, even though the insurance policy contract stated clearly that that was not the case. Given that we were a firm of lawyers, you would think this woman would not have the gall to lie to us when we clearly knew she was lying. And you wonder why this situation is such a mess…)
[...] All the more reason to add further cost-saving measures to the final bill, like a certain Free Choice Act I’ve talked about previously. [...]
[...] about its actual cost. And if they’re really savvy, they should think about adding in Ron Wyden’s Free Choice proposal, which could have a cost-bending effect on all of this, possibly making this a moot [...]
[...] be honest about its actual cost. And if they’re really savvy, they should think about adding in Ron Wyden’s Free Choice proposal, which could have a cost-bending effect on all of this, possibly making this a moot [...]
[...] an incredible distortionary effect on policy-making. Lately, quite a few conservative reformers (like our own E.D. Kain) have lambasted Democrats for not supporting measures like Wyden-Bennet in health care (which would [...]