Can Wyden’s Call For The Elimination Of Employer-Based Coverage Survive New Congress?

wyden_art_257_20080812151619.jpgOn Friday, the 13 co-sponsors of Sens. Ron Wyden’s (D-OR) and Bob Bennett’s (R-UT) Healthy Americans Act wrote a letter to President-elect Barack Obama outlining their shared principles for reform:

Ensure that all Americans have health care coverage;
Make sure health care coverage is affordable and portable;
Implement strong private insurance market reforms;
Modernize federal tax rules for health coverage;
Promote improved disease prevention and wellness activities, as well as better management of chronic illnesses;
Make health care prices and choices more transparent so that consumers and providers can make the best choices for their health and health care dollars; and
Improve the quality and value of health care services.

Most progressive champions of health care reform — Kennedy, Baucus, Clinton, Obama and grassroots organizations — warmly embrace Wyden’s principles but oppose the crux of his plan. As Ezra Klein explains, Wyden’s plan would dissolve employer-based insurance and mandate every employer who had covered his employees to “convert the total they spent on insurance into salary increases creating, in one day, the single largest pay raise America has ever seen.”

Individuals would be required to purchase health care from “one of the options offered by their state’s newly formed Health Help Agency (HHA). The HHA’s will have a menu of private insurance plans, all of which must provide coverage equal to or better than the Blue Cross Blue Shield Standard Plan used by Congress. All plans will be community rated by the state, meaning an end to adverse selection and preexisting condition problems,” the government would offer subsidies of “up to 400 percent of the poverty line,” and “employers will contribute through a set equation related to business size and yearly profits.”

Conversely, the Baucus, Clinton, and Obama health care proposals all build on the employer-based model, thus ensuring that workers keep the insurance that they currently have.

This position is quite popular. According to a recent Gallup poll, for instance, 67 percent of Americans said that they were either completely or somewhat satisfied with the health insurance benefits that their employer offered and businesses seek to build on the employer model.

For these reasons, Wyden’s proposal is politically tricky. Congressional forces for reform and the various coalition groups that are pressuring Obama to make a major push for universal coverage, are all rallying around the employer-system. Wyden’s plan does have bipartisan support, but as other more employer-friendly plans start to wind their way through the new Congress, expect some Democrats and moderate Republicans — who may have signed up for his plan to be “for” something — to support a more mainstream version of reform.