The Healthy Americans Act: So Crazy, It Just Might Work

Americans value outside-the-box thinking… most of the time.  Outside of a small group of avid health care aficionados, mention the “Healthy Americans Act” proposed by Democratic Senator Ron Wyden and Republican Senator Bob Bennett and you’re likely to get the following responses:

A.)     Blank stare.  If you’re lucky, a sympathetic nod.

B.)    “Never heard of it… or them.”

C.)    A completely unsolicited monologue on why the Obama plan or a single-payer system is the BEST HEALTH CARE PLAN EVER!

But there are five reasons why this truly outside-the-box idea is worth looking at – and they’re the same reasons why the Senators involved should strongly influence the health care reform legislation we’ll see in Congress this year.

1.)    It’s bipartisan – really!

As partners in health care reform, Wyden and Bennett are the Starsky and Hutch of the Senate.  But the Democrat from Oregon and the Republican from Utah, who disagree more often than they agree, have found a way to come together on health care.  At a time when health care bills tend to be politically stratified – we’re still waiting for a Republican co-sponsor on HR 676, for instance, or a major Republican to sign on to the Health Care for America NOW pledge – the Healthy Americans Act has 13 co-sponsors, split between Republicans (6 Senators), Democrats (6 Senators) and 1 of whatever the heck Joe Lieberman is calling himself these days.

The necessity of bipartisanship is often overstated, but bipartisan majorities are largely responsible for successful health care programs like SCHIP on the Federal level and the Massachusetts reform plan, which, after all, crossed the finish line under Republican Governor Mitt Romney.

How’s the staying power of this group?  Pretty good, actually, as they jointly wrote a letter to President-elect Obama that laid out their statement of principles for health care reform.  As Ezra Klein says, “Its actually a big deal for the assembled Republicans to have signed a letter codifying universality and private insurance market reforms…”

2.)    This ain’t tinkering around the edges

The Wyden-Bennett plan would, within 2 years, completely phase out the current employer-based insurance model that we’ve used since World War II.  So you know from the start, we’re swinging from the fences.

In a future post, we’ll go into just how accidental and inefficient that model is (or you can just read Dr. Zeke “Brother of Rahm” Emmanuel’s Healthcare, Guaranteed).  But the simple fact is that unless you have thousands of employees, your business has next-to-zero bargaining power with the insurance industry.  If you’re an individual, you’ve effectively got zero – you either take the option your company gives you, or you pay astronomical costs for a purely private plan.    This problem is particularly acute for small business – if one of your employees comes down with cancer, all of your employees’ premiums go through the roof.  But this mess of a system is also punitive to the economy – it keeps productive workers stuck at jobs they don’t like, and it’s one of many reasons why average wages have flat-lined for the past 8 years.  What would have gone to wages goes instead to ever escalating premiums.

Wyden and Bennett shake out this inefficient system, Etch-a-Sketch style.  Every company must make an accounting of their health care dollars and, over two years, turn that into additional wages for their employees.  Each state would create its own Health Help Agency that would offer a menu of private insurance options.  Basically, it would be like the Massachusetts Health Connector or the Federal Employee Benefits Plan – only everyone in the state would be in it.  Moreover, the level of transparency and aid rendered by such agencies would make it possible for individuals to legitimately choose the plan best for them.  Subsidies would be available on a sliding scale based on income.

Why does a conservative like Bennett go for this?  Well, first it hits upon the major conservative value of individual choice – you get to choose your own plan, rather than taking or leaving what your employer offers you.  It takes the burden of skyrocketing premiums off businesses (though it doesn’t leave them off the hook… more on this in a bit) and prevents more industries from being out-competed by foreign companies benefiting from universal health care.  And it’s not government-run health care, the scarecrow of “socialized medicine” anathema to the GOP base.

Why does a liberal like Wyden go for this?  Senators with Wyden’s voting record normally tend to favor cutting out the private insurance industry rather than having every American citizen insured through it.  But under the plan, the private insurance industry would be far more chastened and regulated than ever before.  They would be required to offer their products to all buyers in that state – an end to cherry picking only the health applicants.  They would be required to offer community rates – one price for everyone, regardless of pre-existing conditions, past history or genetics.  A minimum level of comprehensive benefits based on the Blue Cross Blue Shield selection of the Federal Employee Benefits Program would be established for all Americans – no more insurance options that only come into play if you get hit by a truck.  And the state managed health agencies would offer the same options at the same price whether you worked for Google or Angelina’s Pizzeria.

In addition to this dramatic expansion of high-quality coverage, turning all dollars spent on health care into wages would create the single largest pay increase for the American worker in history.

3.)    All this, and revenue neutral, too

Wyden has a funny quote that the Congressional Budget Office is where health care reform bills go to die.  Once you find out how much it costs the Federal budget, your support dries up real quick (as the Clinton health care team discovered).

Price Waterhouse Cooper estimated that the Obama health care plan, as stated during the campaign, would cost $75 billion to $130 billion per year, but would cover 95% of Americans.  HR 676 would cost $1.3 trillion per year in new revenue – and that’s taking all of the efficiency savings into account – but would cover everyone.
The Congressional Budget Office estimates that after two years, the Wyden-Bennet plan would pay for itself.

The Lewin Group would take it even farther – they say it would save $1.4 billion a year compared to what government spends on health care now.

The main costs go to providing subsidies for those whose income level cannot purchase the minimum level of benefits.  In many state variations of SCHIP, that’s how it works now – you receive a subsidy based on your income.  Indeed what we spend on SCHIP would ultimately be folded into the rest of the spending on the plan, as would most of Medicaid.  (Medicare is entirely untouched).

As mentioned, employers aren’t off the hook – they have to pay in wages what they were spending for health care for their employees, but for new employees, they have to pay Employer Shared Responsibility Payments (those who didn’t offer coverage have to make the same payments.)  These payments are set based on the company’s size and earnings, and are redirected into the subsidies for the system as a whole.

As with every plan, there’s the usual talk about investing in primary care, coordinated care, chronic disease management, and electronic records (there’s such a consensus on those points that it’s ludicrous that we haven’t tackled them already).

It seems too good to be true, but it’s really just lateral thinking -- moving existing dollars to where they have the most impact.

4.)    It adjusts for regional differences

Health care in Florida is different than health care in the Massachusetts is different than health care in Arkansas is different than health care in Washington state.  Insurance rates now vary greatly state by state, as do the health concerns of the population.  Both the Obama plan and single-payer treats the country as “one size fits all.”  But one of the elements that made SCHIP so successful was that each state designed its own children’s health coverage program, tailored to their state’s needs.

And when you’re focused on what works in your community, the quality of care goes up.

But there are other benefits, not explicit in the plan.  They say the states are the laboratories of democracy, but with so many national problems driving the health care crisis, most of them have been unable to make great strides in improving care for their citizens.  The Wyden-Bennet plans creates a set of rules that empowers the states to customize their markets.  If those customizations are more efficient, they’ll spread from state to state.

Let’s take a hypothetical – and I acknowledge I’m completely making this up myself.  Most progressives want to see at the least a public option, similar to Medicare, which would directly compete with private insurance companies and, through competition, prove that government-run health care is the best option.  Obama has a national public option for those currently without insurance – 46 million.  But what if, under the Healthy Americans Act, California, Washington, Oregon, Hawaii, New York, New Jersey, Massachusetts, Vermont, Connecticut and Illinois all create their own public competitors?  Now your experiment has 95 million Americans in it, from a wide range of socioeconomic backgrounds – not just the uninsured.

It’s a whole new ballgame.

5.)    It’s not going to pass

Didn’t see this one coming, did you? But the political landscape looks bad for the Wyden-Bennett plan, no matter its policy merits.  Inside Congress, Wyden, Bennett and their co-sponsors aren’t the Big Dogs with the seniority or jurisdiction to push their plans through – not with Ted Kennedy and Max Baucus taking very public stances.  The White House Office of Health Care Reform, led by double-duty HHS Secretary Tom Daschle, has made clear signals that it will make a big push with the Obama plan.

Outside Congress, Obama’s had two years on the campaign trail to make his pitch for solving health care – and he didn’t promise single-payer or the Health Americans Act.  Baucus’s plan is in the same ballpark as what Obama, Clinton and Edwards were proposing, and Ted Kennedy has tremendous brand recognition on the issue of health care.  Single-payer activists have been pushing and educating on HR 676 at the local level for years.  But there are no Healthy Americans Act activists.  Wyden and Bennett just don’t have a big microphone to create public support.

So what’s the point of looking at a plan that’s likely to go nowhere?

Because of the Senate’s filibuster rules requiring 60 votes to close debate on any bill, Democrats need to pick off a couple of Republicans in order to pass darn near anything.  So the Wyden-Bennett plan at least shows that you can find common ground – and those Republican co-sponsors are ready to play, if you take their ideas seriously.

But more importantly, it shows that there are new ideas out there.  In Washington, the health care policy debate takes on an air of staged tragedy – the roles are assigned, the talking points are pre-scripted, the audience is filled with hope that the story will have a happy ending, but we close with bodies all over the stage and Fortinbras deciding we’d better just move on with life in Denmark.

By crafting a plan that thinks outside the box, controls costs enough to be revenue-neutral, adjusts for different region to promote quality and earning bipartisan support, Wyden and Bennett have shown we don’t have to look at health care the same way we always have.