Opinion: A little bit more choice in a reformed healthcare system

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Good news today from the backstage maneuverings on the Senate Democrats’ healthcare reform bill. As The New Republic reported, Democratic leaders have agreed to give more flexibility to millions of Americans who get their health insurance today through their workplace.

First, a little background. My favorite healthcare reform proposal was the Healthy Americans Act by Sens. Ron Wyden (D-Ore.) and Robert Bennett (R-Utah). In addition to being a genuinely bipartisan approach to the issue, it was smart about bringing market forces to bear on the industry. But it also was the most radical departure from the current system, because it would have decoupled health insurance from employment. Instead of continuing to have employers cut deals with insurers and then pay part of the cost of coverage on their workers’ behalf, it would have given employees the subsidies and tax benefits directly, grouped them into statewide risk pools and created new markets for them to shop for policies. In addition to giving workers far more choice of insurer and plan -- most employers have a take-it-or-leave-it approach to health benefits -- it would encourage them to spend their healthcare dollars more wisely. That’s because, for the first time, they’d see the total cost of their insurance and all the options for managing it.

Wyden tried in vain add a variation of that plan to the Senate Finance Committee’s healthcare bill -- his amendment would have let workers take vouchers from their employers in lieu of health benefits, then use those vouchers to help buy individual policies through new state insurance exchanges. Now, finally, he has persuaded Senate Democratic leaders to give his vision of employee choice a foot in the door. Wyden announced a deal this afternoon with Senate Majority Leader Harry Reid (D-Nev.) and Finance Committee Chairman Max Baucus (D-Mont.) to add a slimmed-down version of his plan to the healthcare reform bill the Senate may take up Saturday.

As with his earlier amendment, the proposal would give workers the option of converting the money their employer spends on health benefits into vouchers they could use to buy policies through the state exchanges. The main difference is that this capability would be available only to certain workers who would be exempt from the bill’s requirement to obtain insurance. Specifically, it would apply only to those earning less than four times the federal poverty threshold (e.g., $88,200 for a family of four) whose employer-sponsored insurance premiums would consume 8% to 9.8% of their total income.

It’s not much, but it’s a start. Now let’s see if Reid can get the 60 votes needed to start debate on the bill....

-- Jon Healey