The Wyden/Brown plan
The best healthcare reform bill introduced in congress during the recent healthcare overhaul debate, The Healthy Americans Act, came from Senators Ron Wyden (D, OR) and Bob Bennett (R, UT) and was supported by a number of lawmakers from both sides of the aisle. Unfortunately, due to a number of sacred cows the bill would have tipped, it was never seriously considered by senate leadership or the president.
Now Ron Wyden is back, this time with Senator Scott Brown (R, MA) hoping to pass a new bill aimed at putting healthcare reform back in the hands of the states. Under the law, any state government could implement their own reforms rather than rely on the Federal government’s healthcare bill – provided they met or exceeded the standards set by the federal bill. Here’s Ezra Klein with some background:
This morning, Sens. Ron Wyden (D-Ore.) and Scott Brown (R-Mass.) introduced the “Empowering States to Innovate Act.” The legislation would allow states to develop their own health-care reform proposals that would preempt the federal government’s effort. If a state can think of a plan that covers as many people, with as comprehensive insurance, at as low a cost, without adding to the deficit, the state can get the money the federal government would’ve given it for health-care reform but be freed from the individual mandate, the exchanges, the insurance requirements, the subsidy scheme and pretty much everything else in the bill.
Wyden, with the help of Sen. Bernie Sanders (I-Vt.), was able to build a version of this exemption into the original health-care reform bill, but for various reasons, was forced to accept a starting date of 2017 — three years after the Patient Protection and Affordable Care Act goes into effect. The Wyden/Brown legislation would allow states to propose their alternatives now and start implementing them in 2014, rather than wasting time and money setting up a federal structure that they don’t plan to use.
Reihan Salam is worried that the language in the bill will make conservative healthcare reform proposals impossible to implement, limiting reform to blue states and centralized solutions:
My main problem with the new Wyden-Brown proposal is that it requires that states offer their citizens insurance as comprehensive as PPACA requires. Conservatives need to press for more room for experimentation.
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My understanding is that a consumer-directed system by suggests something like catastrophic coverage, modified by first-dollar coverage for preventive services, let’s say. Would that fall under the “as comprehensive” rubric? I’m guessing that the answer is no.
And so Vermont is allowed to go for a more comprehensive and centralized approach, while Utah and Indiana and Texas will not be allowed to embrace an HSA-driven catastrophic approach. I could be wrong, but I fear that the deck is stacked. Given that Sen. Scott Brown represents Massachusetts, it’s not surprising that he’d embrace this idea. But again, I think conservatives should ask for more. Let’s not dismiss this proposal out of hand, but let’s see if Sens. Wyden and Brown are open to a more level playing-field.
This is a reasonable concern. I think overall this is a very good idea, but I agree with Reihan that conservatives should push for more room to experiment with market-based or consumer-driven approaches. I think we could have a much more serious conversation about healthcare reform if we were able to truly see different examples in action across the country.
Many problems in our healthcare system, however, stem from national issues that can’t be easily solved on a state-by-state basis. For instance, insurance companies are prohibited from selling insurance across state lines. It becomes very difficult to create the sort of risk pools necessary to cheaply insure Americans when those pools are confined to states. The employer-benefit tax exemption, the many problems with cartelization in the healthcare industry – these are national issues which require federal fixes.
So as fond as I truly am of the new Wyden/Brown legislation (with the caveats that Reihan mentions) I’m afraid that it won’t strike at some of the more fundamentally screwed up parts of our healthcare system. This doesn’t mean it’s not a good step to take, but it only gets us a little closer to the long-term goal of a sustainable, fair, and still innovative healthcare industry in the United States.
> I agree with Reihan that conservatives should push for more room
> to experiment with market-based or consumer-driven approaches.
Sure; but to be fair, there has to be an API somewhere. What happens when someone from a non-market driven approach state relocates to one that does? Or the other way ’round?
If I’m a citizen of “free market” state, passing on everything except the cheapest possible catastrophic coverage with a really high deductible, and I get leukemia, how easy is it for me to move to a full-coverage state with no deductible?
Assuming these sorts of free-rider riders are taken care of, I like the idea of diverse attempts to tackle the same problem. I’m not convinced, in the case of insurance, that they will be.
It also seems sort of weird to talk about wanting to have larger risks pools and then be proposing an approach that will by nature create smaller risk pools (at least, smaller than “everybody”), E.D. How do you reconcile that?Report
Hope this isn’t too much “inside baseball,” but the advantage of selling across state lines has nothing to do with risk pools and everything to do with avoiding costly state mandated benefits. Any national HMO or insurance company basically looks the fully insured book of business as a whole and then makes rate adjustments to fit locality, etc.Report
The “advantage” of companies being able to sell policies across state lines is that they can then do what the credit card businesses did, and cherry-pick the states for one that will basically let them write the insurance regulations in exchange for headquartering there.Report
As someone who spent over 30 years in the industry, I beg to disagree. First, unlike banks, insurance companies don’t domicile in order to be regulated. They are regulated in every state in which they are licensed. That is, a company domiciled in PA and doing business in PA and AZ is regulated by both PA and AZ. Many confuse state regulation, including solvency issues, with state mandated benefits.
Selling across state lines means that consumers in a state like NY, which has many mandated benefits, would have the option of buying a plan design approved for sale in a state with fewer mandates, thus paying a lower premium. The insurance company selling a non-NY plan in NY would still be regulated by NY and pay premium taxes on NY sales to NY. Consumers, or employers who purchase on behalf of their employees, would have additional choices. And remember, large employers, who self insure, are exempt thru ERISA from all state mandates. Selling insured products across state lines would give small employers and individuals the same rights as large employers.Report
” If a state can think of a plan that covers as many people, with as comprehensive insurance, at as low a cost, without adding to the deficit…
This is a joke, right?Report
Well that’s sort of the issue Reihan takes with it, you know?Report
I guess I don’t really understand what “as comprehensive” means, and no-one seems to be explaining. Surely what we care about is whether people have access to healthcare, and whether the conditions under which they do it are fair? I’m not really sure how “comprehensive” plays into this. No scheme can cover all possible treatments for all conditions and all people and be affordable. Does a state scheme have to cover the same people as the federal one? Or the same conditons? Or the same treatments? Or what?Report
we have a good system medicade and medicare. what they need to do is fix it the right way. stop going into it to fund some pork programs and use it for the purpose that it was created for. we all pay into the system. what we have to do is tell these lawmakers on capitol hill is do the right thing by the people.Report