Wyden Tries Again on Consumer Choice Proposal

The idea of a national health care exchange — that is, a national, regulated market of private insurance options where consumers can choose their own plan — is the central provision of the Healthy Americans Act, a universal health care bill introduced by Sen. Ron Wyden, D-Ore., back in 2007.

All of the health care bills before Congress provide for exchanges, but they are open only to those who don’t have an offer of health insurance from their employers. In legislative speak, the bill sets up “firewalls” to prevent more people from enrolling.

Wyden’s bill would have severed the connection between health insurance and employment, ending the tax-free status of employer-sponsored health care. Tax revenue raised from ending the employer tax exclusion would be go toward subsidies for insurance based on income. The Congressional Budget Office estimated that this legislation would be “budget neutral” — in other words, would reduce the deficit — within three years. Despite being beloved by wonks and economists, the Wyden plan went nowhere; it had powerful adversaries, including labor unions and some large employers. The most Wyden can hope for is this latest, largely watered-down version of his idea.

This proposal opens the exchanges a bit more — to individuals whose employer-provided insurance costs exceed 10% of their income (or 8% for workers who would not be eligible for subsidies in the exchanges). Workers would receive a “tax-excluded payment,” — essentially a voucher for the amount their employer would have paid — to enroll in a plan on the exchange.

The amendment doesn’t even begin to accomplish what Wyden’s original proposal had aimed to do, but would nonetheless provide for more consumer choice than is currently in any of the bills before Congress.