Senate Majority Leader Harry Reid (D-NV) has agreed to include a watered-down version of Sen. Ron Wyden’s (D-OR) ‘Choices Amendment’ in the merged Senate bill. Wyden, an ubiquitous presence on cable television, has been hawking his idea of instantly opening up the insurance exchanges to Americans in employer-sponsored coverage for months. He introduced the amendment in the Senate Finance Committee just hours before it ended its marathon mark-up session, but withdrew it for later consideration.
Under this compromise, a small sliver of the population — individuals and families under 400% of the federal poverty line who receive employer-sponsored coverage and spend 8-9.8% of their income on premiums — could “convert their tax-free employer health subsidies into vouchers that they can use to choose a health insurance plan in the new health insurance exchanges.” Currently, individuals in employer-based coverage who have to spend more than 9.8% of the incomes on premiums aren’t required to purchase health insurance and don’t quality for affordability credits if they enter an Exchange:
“As I have long said, empowering Americans to choose the health insurance that works best for them and their family is the single best way to hold health insurance companies accountable,” Wyden said in a statement. “While this is just one step in the direction of guaranteeing choices for all Americans, it is a major step because – for the first time – it introduces the concept of individual choice to a marketplace where it has long been foreign. This is a significant step toward real reform.”
The theory of instantly “empowering Americans to choose the health insurance that works best for them” is sweeter than the reality. The merged senate bill establishes a time line that more or less allows everyone to choose a plan from an exchange by 2017. In this way, the legislation builds on the current structure but also sows the seeds for an eventual transition to a more ‘individualistic’ system — or what Wyden calls “real” reform.
This ‘time release’ approach — to borrow a pharmaceutical term — is intentional. Opening the exchanges only to small businesses, individuals and the self-insured for a limited period preserves the employer contribution in the health care system and allows the exchanges to build a capacity for covering more people over time. It helps the Exchanges find their footing without being overrun by millions and millions of new applicants from the employer market. Care continuity is also better preserved.
In short, the existing legislation accomplishes the main goals of Wyden amendment on a more realistic timetable. Wyden was concerned that it didn’t have his name stamped all over it. Now it does.