Ron Wyden (D-OR) offered an amendment to the Baucus bill that would have made it possible for all Americans to purchase health insurance through the Exchange. The amendment was ruled out-of-order by Senate Finance Committe Chair Max Baucus (D-MT). Presented below are arguments for and against the amendment – both from the U.S. Chamber of Commerce.
As readers of this blog are aware, Senator Ron Wyden has for years championed legislation that would create a single, national marketplace, regulated by the federal government, through which all Americans could purchase health insurance. Insurance policies would have to meet certain standards as to coverage (for example, they would have to cover preexisting conditions and pay for preventive care), and would have to offer consumers information in sufficient detail and in a standardized format so as to permit comparisons as to price and quality of the coverage of the various plans. Here is Senator Wyden's description of his proposal:
More Choice for Workers: Workers who don't like their employer plans can choose to go to the exchange and choose any plan available through the exchange. If their employer currently provides health coverage, the workers will get a voucher equal to the money their employer currently pays to help pay the cost of an exchange plan. The voucher amount would be excluded from the employee’s income and the cost of the voucher would be deductible by the employer. If the workers choose a plan that costs less than they have currently, they get rewarded with extra money in their pockets.
More Choice for Employers: Employers also have more choices: they can give their workers the ability to buy health coverage in the exchange or bring their entire group to the exchange and get a discount. This choice could be phased in for the mid-sized and large employers over a few years after the exchange gets going. Employers with good health plans will be able to maintain their plans because they will offer their workers better value. Employers with high cost, low value plans can cut their costs by letting their workers go to the exchange.
Cost Containment: The plan would reward consumers for selecting more efficient lower cost plans by enabling them to retain the full amount saved by electing a lower-cost option.
As a member of the Senate Finance Committee, Wyden framed his proposal as an amendment to the Baucus bill – he calls it the "Free Choice Amendment." On September 22, Tony Romm of The Hill reported that Wyden's proposal was gaining support in Congress. However, on October 2, Senator Max Baucus (D-MT), ruled the Wyden amendment out of order on the ground that it had not been fully "scored" by the Congressional Budget Office, and the amendment was not submitted to a vote before the Committee. Jon Walker at FireDogLake has posted an article stating that Baucus was mistaken, and that the CBO actually had scored the Wyden amendment and that it had found that the Wyden proposal would have saved $1 billion over ten years.
The U.S. Chamber of Commerce supports the creation of the Exchange, seemingly along the lines proposed by Senator Wyden. Here is what Dick Castner wrote in his column for the ChamberPost on September 4.
We could create a vibrant marketplace with a health insurance exchange that connects consumers with insurance options, removing fragmentation and spurring choice and competition.
On September 30, however, The Politico reported that the Chamber of Commerce opposed the Wyden amendment on the ground that it would interfere with the ability of employers to provide their own health insurance plans to employees. If employees could "opt out" of employer plans and receive vouchers to pay for health insurance on a national market, it would be too difficult, the Chamber felt, for employers to develop and negotiate health insurance plans for their employees. Chairman Baucus apparently agrees – according to an article by Allison Bell of National Underwriter, Baucus characterized Wyden's proposal as "destabilizing."
In my opinion, if the United States is going to retain the system of paying for health care by means of private health insurance, the only way to reduce cost and thereby widen access to health care is to make the market for health insurance more competitive – to remove barriers to entry and to improve the flow of relevant information as to price and quality. The Wyden plan would move us down the road to a more competitive marketplace for the purchase of health care.
