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Before you give up entirely on the idea of health reform, take a look at the Healthy Americans Act, a broad-based reform bill with some interesting tax provisions sponsored by senators Ron Wyden (D-Ore.) and Robert Bennett (R-Utah).
The bill, which has been kicking around for a couple of years now, would:
Provide universal coverage.
Mandate that everyone buy insurance.
Require insurance companies to cover everyone.
Restructure financial incentives to reward cost-effective treatment.
The bill would work like this.
All Americans (except for the military and seniors, who would still get Medicare) would purchase insurance through private exchanges managed by the states. Insurers would be required to offer a fairly generous minimum benefit plan, and they would be barred from underwriting coverage based on health status or age.
Employers could continue to offer insurance to their own workers (though few would) or employees could buy through the state exchanges.
The current exclusion for employer sponsored insurance would be replaced with a generous deduction (the level depends on family status but a couple with no children would deduct up to $12,000). Companies that currently offer insurance would convert their share of premium payments into taxable wages. Employers also would be required to contribute a share of premium costs through a tax that would range from roughly $250 to $2,000 per employee, depending on company size and revenue per worker. Low-income people would receive government subsidies to help pay premiums, plus Medicaid benefits would supplement their private insurance. One insurance option would be a high-deductible, tax-advantaged Health Savings Account.
According to CBO, the plan would pay for itself and not increase the deficit.
Wyden-Bennett has one other advantage over the other measures floating around Capitol Hill. It is only 166 pages long. Now, measuring the quality of a bill on its length alone is silly. On the other hand, we are learning that 1,000-page bills are inexplicable to most Americans and that, not surprisingly, people fear new laws they can’t understand. There is something to be said for relatively simple, all else equal.
The bill is by no means perfect. For instance, I’d replace the deduction with a credit. And there are plenty of questions about whether state insurance risk pools would be big enough to keep premiums low, whether insurers could ”cherry-pick” the healthiest customers, whether the employer tax is too steep, whether carriers would actually compete in some states, and how Medicaid would work with private coverage. But all these issues can be addressed within the bill’s basic framework.
While many policy experts think there is a lot to be said for Wyden-Bennett, it has little support from the left or the right. Liberals don’t like that it would largely replace the employer-based system and that it relies on private insurance rather than government coverage. Conservatives dislike what they see as excessive government regulation.
In the current hyper-partisan environment, the conventional wisdom is that a middle-of-the-road bill such as this has no chance. But given the mess that health reform has become, President Obama could do a lot worse than building on Wyden and Bennett’s idea when he gives his big health speech tomorrow night.
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