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.

[…]

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.