Posted on February 12, 2008

Wyden's "Healthy Americans Act" is Wrong Model for Health Reform


Personal communication, Dr. Walter Tsou
February 12, 2008

The bipartisan authors of the Healthy Americans Act, Senators Ron Wyden (D-OR) and Bob Bennett (R-UT) were in Philadelphia today for a two hour session to explain their bill. Their purpose was to build public support for their bill with the goal of having most of the disagreements worked out by the time a new president takes office in January 2009. The bill depends on the “mandate” model of private insurance. The potential problems with this approach have been extensively written about by PNHP.

Nevertheless, it was a unique meeting to have both Senators explain their bill and to sit with an audience for an hour to answer questions. The first tip off was that the forum was sponsored by AmeriHealth, a large Medicaid HMO. The Mayor of Philadelphia (who will be featured this Wednesday on ABC News with Charles Gibson) came to thank them for coming and stating his gratitude that someone in Washington was working on this problem. He came short of actually endorsing the bill however and conveniently left.

This left the program to Wyden and Bennett.

Wyden and Bennett said there were five major goals in their plan which was a piece in progress. Those goals were choice of plans to fit each family’s needs, portability which is tied to individual insurance supposedly with a lifetime guarantee of coverage as good as members of Congress (a term he used repeatedly), tax reform to support the same tax benefits that large employers get, healthy behavior to promote personal responsibility by giving premium discounts for controlling your blood pressure or diabetes (hard to imagine the kind of gaming that occurs here), and the Republican favorite - market forces, based on transparency in prices and quality and individuals presumably shopping around for cheaper and better care. Bennett says that many Republicans have a hard time even agreeing on universal health coverage.

Wyden mentioned that we spend $2.3 trillion on health care, but were not getting enough value for our money. In order to pay for the premiums to go to private insurers, they would require all employers to give all American workers the actual value of their health care benefits in higher wages but that they then turn around and require you to take those wages and purchase individual insurance. (This idea is something of value to single payer advocates but instead of paying premiums, you would pay taxes to fund a single payer plan. ) There would be three large private insurance risk pools. The first would be all employees who would basically buy into a program like the federal employee health benefit plans. The second would be all individual self employed and uninsured who would be in another big risk pool. In order to avoid adverse risk selection, they would require community rating by insurers and no preexisting condition exclusions. The third risk pool would be all Medicaid patients who could buy their insurance from Medicaid HMOs like AmeriHealth, but if the benefits were not as good as what members of Congress get, the federal government would subsidize these plans to ensure complete benefits. (actually, Medicaid benefits are generally much more comprehensive than private insurance, but because they pay so poorly, few providers accept Medicaid payments).

Several questions were asked, but my question basically challenged why they did not choose single payer since private insurers have much higher administrative costs, that single payer would be a much better negotiator of health prices and quality than Mrs. Jones down the street, and what kind of fines would they envision to enforce their mandate. Wyden stated that whenever he has a public forum, some single payer advocate explains the advantages of single payer and there is cheering in the audience. Then there is someone in the back of the room who denounces government. And finally, someone says “we want what you have”. Wyden pulls out his health card and says that he has private health insurance and explains that his plan would give Americans “what members of Congress have”. This seems to quiet the audience from his perspective. (I have no doubt that members of Congress do not face the denials so nicely outlined in Sicko.) In terms of transparency in prices and quality, Bennett said repeatedly that Utah’s Intermountain Healthcare delivers much better health care for less money and that presumably his state would benefit if there was more transparency in cost since they presumably would choose Intermountain Health. Bennett also seemed to believe that the risk pools were so huge that they could drop the private insurance overhead to “3-4 percent”, (which is sheer fantasy). They dodged the question about “fines” for enforcing the mandate, basically saying that terms like “garnish your wages” were words that opponents use and that basically the plan would deduct premiums from our paychecks in order to fund the plan. (Why deducting premiums from our paychecks to fund private insurance companies is acceptable but deducting a smaller amount using taxes to fund single payer was not acceptable seems an important question, but I wasn’t given a chance to debate them because so many others had questions.)

Others asked about malpractice, about whether states would be allowed to experiment with health care reform (they would), assurance of quality of care, etc.

They believe that since they have a bipartisan bill with six Republicans (Judd, Gregg, Grassley, Coleman, Crapo, Alexander) and six Democrats (Stabenow, Nelson, Lieberman (no surprise here), Carper, and Landrieu) plus the National Federation of Independent Businesses, the CEO of Safeway, and SEIU, they have a good shot at setting the framework for the next president. Add to that that Obama and Clinton are basically using the framework of private insurance in their plans and you have the basis to worry about another 4-8 years of a costly failed experiment in health care reform.

Despite these rumblings, I think it is pretty clear that the American people want single payer. It is the politicians who are out of tune with this. We will need to do a lot more educating about this. The impending recession may cause millions more Americans to lose their health insurance. Simply requiring them to buy insurance is not a solution in the face of a recession and we should demand that Congress create a real safety net, not one based on the fantasy that everyone buy overpriced for profit private insurance with huge deductibles.