Wyden/Bennett Universal Health Care Plan Would Pay for Itself

The AP is reporting that the universal health care plan put forward by Senators Ron Wyden (D-OR) and Robert Bennett (R-UT) could be operational by 2012 and be budget-neutral by 2014. A budget-neutral item brings in as much revenue as it costs. The kicker to this plan and one of the reasons it has a host of Republicans as co-sponsors is this:

Sen. Ron Wyden, D-Ore., one of the plan's co-sponsors, said the report showed it is possible to provide health care coverage for all Americans — including the estimated 47 million people who are uninsured — without a large tax increase. "We can get everyone in America health care coverage without breaking the bank," he said.

Universal Health Care without tax increases? How is it possible and where is the catch?

The plan is not Medicare for All, it uses the private health insurance companies, but it lays a thick layer of good regulations over them. It's a philosophical cross between Teddy and Franklin Roosevelt. Here are a few key points about the plan, from around the blogosphere.

  1. The government would subsidize health caree for people up to 400 percent of the poverty level.
  2. The system would replace employer-based health insurance systems.
  3. The coverage would be guaranteed to be as good as that which federal employees (Senators) receive.
  4. The plan is paid for by a new tax on employers from between 3 to 26 percent, based on the size of the companies and this spending would replace the money employers now spend to provide private heath insurance to workers.
  5. The legislation now has 12 senators onboard—six of them Democrats, six of them Republicans (Grassley, Judd, Gregg, Alexander, Coleman, Crapo).
  6. No insurance provider may discriminate based on pre-existing conditions, occupation, genetic information, gender or age. Nor could they deny insurance to those who ask for it.
  7. The Lewin Group estimates that the plan would save $1.5 trillion over 10 years
  8. "The grounds left for competition are price, benefits, and quality. The hope is that if insurers can no longer eke out advantages by denying or reducing health coverage, they will be forced into competing to offer the most comprehensive services at the lowest cost."

This isn't health care for all, this isn't Medicare for all. But, this is a good health care plan, at first blush. Over at PNHP they have some reservations about what this will do to wages down the line.

The theory is that in competitive labor markets, total compensation is determined by the market, but the distribution between payroll and other benefits such as health plans and pensions does not influence the total compensation. Thus termination of a health benefit program results in an increase in wages that has the same monetary value.

In Sen. Wyden’s proposal, not only does it assume this theory to be true, it also provides back-up enforcement by requiring that employers increase wages by the same amount of the health benefit that will be terminated under this Act, but only for the first two years. After that, the competition of labor markets resumes, but without the complication of a health benefit program. Employees are on their own for accessing and funding their health plans.

...Have wages kept up with the costs of basic needs? There certainly has been a redistribution from wage earners to the wealthy. The minimum wage has not been increased for many years. Consumer debt continues to expand. Personal savings are now a negative. Personal insolvency continues to grow. Yet employers are not providing wage increases that are indexed to food, nor to housing, nor to transportation. Now that they are no longer in charge of health coverage, they will feel no obligation to index wages to health costs either.

This is a very good point. When health care is no longer tied to employment, it will not be indexed into raises. If you want proof, look at the skyrocketing increases in gas/heat/food in the last year. Did you get a raise based on the price increases? No, of course not. And, health care has grown at at least twice the inflation rate.

In many ways, this plan will contain the beast that is private health care insurance. But, in other ways, it will provide employers with the opportunity to screw their employees by lowering wages relative to health care inflation in the long-run. The same way that we hear arguments against raising the minimum wage, we will hear arguments over the tax rates on employers for insurance. "We can't raise the tax rates or else businesses will go broke. So, we need to cut services and/or allow insurance companies to increase what they charge."

If this plan relies on the good nature of the free market system to give pay raises that keep up with inflation....


There is a lot of excitement about this plan.

But, I need to have answered for me what will happen after the first two years. Perhaps if they could add an amendment that would link the minimum wage to inflation, so that wages would increase over time?

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

I have a couple of other questions

A lot of the employers who pay minimum wage don't offer health insurance, either. How would this plan affect their employees? Would they be included? Would those employers be required to pay the tax?

I agree, tying a living wage requirement (incrementally increasing the minimum wage over time so that someone could actually live on it.) would be a great idea.

Be the change you wish to see in the world. --Gandhi
Pointing at Naked Emperors

I think all people are required to buy insurance.

And, all employers would be taxed. Maybe the mom & pop coffee shop gets the 2% tax while Glaxo pays the 30%. But, they all get the benefit of healthier employees. From another website I was just reading:

# provides incentives for individuals and insurers to focus on prevention, wellness and disease management
# creates meaningful and easy-to-understand wellness statistics so that Americans can compare health care plans

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.


Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.


I'm a proponent of decoupling employment and health insurance. I can't even begin to make a conceptual case for businesses having any role in this issue whatsoever. I'd rather see business funding as a transitional plan, not and end state.

You know I don't care to give companies any special rights or privileges in any area. But neither do I want to give the responsibility for something that's none of their business. Health care is none of their business.

I agree with this.

But I have to tell you, I've been so dependent upon employer insurance that I am afraid of what would happen. I had an opportunity late last fall to leave my job and work contract work that would be a larger income, but we wouldn't have the health insurance. We shopped around, and damn. It would have cost us nearly 3 times the total of what my company pays and what we pay for me and my family.

The other thing I don't like about employer based health care, at least in NC is, that not every employer or insurer gives equal benefits to same gender life partners. That's why I ultimately want the employer/private insurance company out of the equation, and have everyone, no matter who they are or who they are married to, eligible for benefits.

Be the change you wish to see in the world. --Gandhi
Pointing at Naked Emperors

I don't disagree with this James,

But neither do I want to give the responsibility for something that's none of their business. Health care is none of their business.

but what we're seeing these days is a radical shift from employer-provided health insurance as a common element (in benefit packages) to health insurance being an uncommon element, and this is one of the major reasons our ranks of uninsured has grown so much.

I can't even begin to make a conceptual case for businesses having any role in this issue whatsoever.

I know you already know this, but: efficiency is the key to increasing profit margins, and experience is the key to fine-tuning your efficiency level. Experience is only achieved through employee retention, and benefit packages play a major role in this.

As health insurance migrates out of the realm of employer responsibility, the transitory nature of the work force increases. Experience and efficiencies drop, financial stability and job security amongst the workforce drops, and both management and labor suffer for it.

Another bullshit idea from the 'rich man's club'!(US Senate)

Except for a few that I could count on one hand, the rest of the US Senate is all about protecting their rich buddies in the medical and pharmaceutical industry. It's all about avoiding regulation, and let the insurance industry, which has brought us to this fiasco, write up some boondoggle that has the gov't, and the patients going bankrupt. The rest of the world laughs at our system of allowing these crooks to control us, just like they laughed when we decided to single-handedly invade Iraq. And now that we have Hagan as a possible replacement, it will be a continuance of kissing up to these corporations. Pathetic!

You know, denno,

You should really learn to say what you feel. :-D

And have you met Stan?

Be the change you wish to see in the world. --Gandhi
Pointing at Naked Emperors

I'm not sure where you stand based on this.

Because the Wyden plan would lay a nice, thick layer of regulation on the health insurance industry. At least for the first couple years the industry would only have one way to compete, not by cutting services,but by providing better care for the money.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

The only reason why they're involved in providing health care...

Is because the FDR Administration, in all of their (not so) infinite wisdom, decided it would be a great idea to set price and wage controls and then provided favorable tax treatment to employer-provided health insurance and benefits to incentivize people to take jobs. I don't have the latest annual figure, but the last time I checked (it was a couple of years ago), the cost of the tax expenditure for employer-provided insurance (both the exemption from corporate taxes and the favorable individual tax treatment) was more than $400 billion a year. I would contend that this policy alone (coupled with not giving the same tax treatment to individual consumer plans) is responsible) for 60-75% of the problems in the health care industry, maybe even more. Here, we have yet another instance of government intervention royally screwing things up.

Eliminating the government-created coupling employment and health insurance has to be one of THE focuses of health care reform.

I was born when Roosevelt was in office, but my memories of ..

a president started with Truman. And I do remember in the early 50s, when TV was really starting to catch on, they showed a blurb on the news of how those 'poor people' in England and the scandinavian countries had to stand in line for their medical care because of their socialist system. Even then, the medical industry thought it was important that they continue unregulated. Even now, after no other country in the world is crying out that they would like our system, our presidential candidates still turn to the medical insurance industry to come up with a 'premium' based plan! We pay far more than any country for health care, but our quality is way down on any list. Yes, Linda, after 65 years, I know bullshit when I see it!

Give 'em Hell, Denno!


relocating from Indianapolis, IN to RTP, NC soon; got any advice for me?

I wouldn't recommend drugs, alcohol, violence, or insanity for everyone, but they've always worked for me. -- Hunter S. Thompson

Garner, NC

I wouldn't recommend drugs, alcohol, violence, or insanity for everyone, but they've always worked for me. -- Hunter S. Thompson

I think there ought to be a balance...

I fear that the attempts to make health care exclusively an individual responsibility would result in a significant increase in the number of uninsured in our state and our country. While employers have seen the cost of providing that coverage increase dramatically (and have passed those costs on in either reducing benefits or in higher costs borne by the employee, we need to have a frank conversation about why costs are rising and what options exist to stem that rise. I believe we need to start by looking at wellness and what promises it holds to address the medical needs of individuals with serious conditions such as diabetes and hypertension. But it also means that we have to find out where the real options exist. There are so many moving parts and eliminating the employer-deduction may be the break the system needs, but I seriously doubt it. In fact, I am personally convinced that it may break the system.


Thanks for the thanks

and for weighing in on this issue.

I had a conversation with a big deal insurance executive a few years ago in which he said there was easily enough money flowing through the system to make almost anything possible ... if only we could start with a blank slate. But the slate ain't blank at all. In fact, different sections of the slate are occupied by warring factions with lots of dollars to protect.

I've always assumed we'd need a two- or three-phase evolution to get where we want to go. The problem is, we can't agree on where we want to go.

There's the YoYo vs. the Witts. You're on you're own ... vs ... We're in this together.

The problem is that both are true.

it is true about the conflicts...

As I've said in a number of speeches over the last five years, health care is not like checkers... it's like chess. There are so many players and they each have strong motivations and turf to protect and it will require less of a legislative effort to reform it as it will necessitate a forum that mandates a solution. It worked in Kansas and ought to work here. Pharma says that their products ought to save money spent on doctors and hospitals, which threatens them. Some doctors disagree with other doctors on the best way to spend the money. They think that the payors (insurance companies, TPAs, self-funded plans) ought to pay them more quickly. Insurance companies (providers too) spend WAY too much on technology. Employers are getting crushed by the costs and employees are spending nearly a 1/12 of their income on shared costs.

We are headed for a major crisis.

One thing I like about this plan.

The health care coverage stays with you, no matter where you move. That means that if you have an unhealthy lifestyle, that insurer is stuck paying for it. Right now, they assume you'll move to another job or that they will drop you for one of a million reasons when it gets too expensive to take care of you.

But, if they know ahead of time that THEY will be paying for your dialysis and medication for life - then they'll be more apt to push you to have a healthier lifestyle. It cuts costs in the long-run, insurance companies just haven't had to be concerned about the long-run.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

I only sampled the article, but they make the point....

Employment-based coverage is still the most prominent form of health insurance in the United States at 59.7% of all Americans; however, the rate of this coverage has fallen in every year since 2000. In 2000, 64.2% of Americans had employer-provided health insurance. By 2006, this percent had fallen 4.5 percentage points. Nearly 2.3 million fewer Americans had employment-based insurance in 2006 than in 2000. This decline does not take into account population growth. As many as 13 million more people would have had employer-provided health insurance in 2006 if the coverage rate had remained at the 2000 level.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Watched this interesting Bill Moyers episode...

Bill Moyers’ Journal to Feature California Nurses Association/National Nurses Organizing Committee in Friday, May 9th Episode

National Nurses Movement is Leading Proponent for Single-Payer Healthcare Reforms—“Medicare for All”

Turning their camera on the fastest-growing union in America—and the nation’s largest union of RNs—Bill Moyers’ Journal will feature the California Nurses Association/National Nurses Organizing Committee’s fight for guaranteed, single-payer healthcare in an episode scheduled to air this Friday at 9 p.m. EDT (check local listings at http://www.pbs.org/moyers/journal/about/airdates.html).

The airing comes as CNA/NNOC, and its allies in the Leadership Conference for Guaranteed Healthcare, prepare for a busy summer of healthcare organizing that includes a National Day of Action Against Health Insurance Corporations on June 19th, with a major rally outside a convention by the industry group AHIP (America’s Health Insurance Plans) in San Francisco. (For more information, visit www.GuaranteedHealthcare.org.)

CNA/NNOC formed the Conference, along with Physicians for a National Health Program, Healthcare Now!, and Progressive Democrats of America, to advocate for the kind of guaranteed healthcare on the single-payer model that is succeeding in nearly every other industrialized democracy. The public—and healthcare experts—has repeatedly expressed support for this kind of “Medicare for All” reform, but politicians have been slow to catch up.

CNA/NNOC and fellow single-payer supporters have engaged in a wide variety of innovative organizing tactics in support of their healthcare proposals, including television ads targeted to all Presidential candidates and a series of print ads calling for all Americans to receive the same medical access as Vice President Dick Cheney. "There shouldn't be a double standard," says Rose Ann DeMoro, executive director of CNA/NNOC, on the show. "We, as the public, pay for Dick Cheney's care ... why is the government not providing the same type of care to all Americans?"

CNA/NNOC’s efforts have been supported by its rapid growth, and the creation at long last of a national nurses’ movement. CNA/NNOC now represents over 80,000 RNs in all 50 states. For more information, visit www.CalNurses.org.
MY comments:They made a very valid point that Cheney would have been dead now, if he was tried to get coverage with the existing plans we now have. But the gov't has their plan which automatically covers all employees regardless of pre-existing coverage. This is what we should be aiming for. A single-payer system that is not profit oriented, or class discriminatory.
I did copy and paste, and added my comments. Hope it goes on.