Better Than Other Proposals – Still Obviously Wrong

I’ve written about Sen. Ron Wyden in the past, in less than favorable terms. Today, I’m feeling antagonistic. I’ll try to contain myself.

Several business and labor leaders on Wednesday hailed a proposal to provide health care coverage to all Americans through a pool of private insurance plans.

A dozen years after Congress rejected a Clinton administration plan for universal health care, Oregon Sen. Ron Wyden offered a plan he said would provide affordable, private health care coverage for all Americans, except those covered through Medicare or the military.

“Employer-based coverage is melting away like a Popsicle on the sidewalk in August,” Wyden said.

Wyden, a Democrat and a member of the Senate Finance health care subcommittee, said his plan would “guarantee health coverage for every American that is at least as good as members of Congress receive and can never be taken away.”

Wishing something true and having it come true are not the same. The pool will, of course, not stay private. If the plan is affordable, it will be crap. Employer-based coverage should melt away because it’s a horrible scheme for keeping people insured and for maintaining economic efficiency. And “can never be taken away” is as empty a promise as you’ll hear today, at least since no one is talking about Social Security. Basically, before presenting the facts, it’s clear this will be a steaming pile.

Before getting to the plan, let’s consider what the business and labor leaders said:

[Service Employees International Union international president Andy]Stern called employer-based health coverage a relic of an industrial economy that is long gone, and said U.S. companies “cannot compete in a global economy when we put the price of health care on the cost of our products, and our competitor nations do not.”

Stern said the health care system had failed to create jobs while adding to trade deficits and holding wages stagnant. For the nation’s 46 million uninsured, “it is a failed moral policy as well,” Stern said.

[Safeway Inc. CEO Steve] Burd said his California-based grocery chain had saved millions in health care costs by emphasizing preventative care and offering discounts for nonsmokers and others with lower health risks.

Mr. Stern’s comments are based on the fact that employer-based health coverage is usually a white-collar benefit. Fair enough, but the solution for that is to unhook the tax incentive that encourages health care instead of cash as an employment benefit. The free market will better determine what meets people’s needs than the few-sizes-fit-all policy structure now offered by most employers. But that wouldn’t involve the government, which is why it isn’t considered.

Mr. Burd’s comment provides an interesting insight, as well. Let’s see, preventative care? Wise. Duh. (…with exceptions…) Discounts for nonsmokers? Discounts for those with lower health risks? Holy bat smoke, that sounds like incentives. Where else have I heard about incentives? Oh, that’s right, economics. Specifically, free market economics. Government has no incentives, despite Sen. Wyden’s claims. Why are we going through this doomed-to-fail exercise?

Moving on, what’s in the plan:

Wyden said his new plan would allow workers to carry their health insurance from job to job without penalty. More efficient administration and more promotion of competition for health care plans, he said, would allow greater coverage while costing no more than the government is paying today for health insurance coverage.

The plan would require that employers “cash out” their existing health plans by terminating coverage and paying the amount saved directly to workers as increased wages. Workers then would be required to buy health insurance from a large pool of private plans.

After two years, companies would no longer have to pay the higher wages. Instead, Wyden said, they would pay into an insurance pool, based on annual revenues and the number of full-time workers.

That sounds a hell of a lot like employer involvement, with government mandates thrown in. The problem with employer-based healthcare is that most employers are not in the healthcare business. Let them get out of the business so that the market can devise solutions. The ability for politicians to promote stupidity stopped being surprising long ago, but it’s no less frustrating. For example:


The Working Group arrived at three guiding principles to financing new initiatives:

  • The financing methods should be fair. Fairness is evaluated using three factors. First, financing methods should not have the effect of creating a disproportionate increase in the financial burden on the sick; second, responsibility for financing of health care should be related to a household’s ability to pay; and third all segments of society should contribute to paying for health care.
  • The financing methods should increase incentives for economic efficiency in the health sector and the larger economy.
  • The methods should be able to realize sufficient funds to pay for the recommended actions.

The babble goes on with wonderful theories of savings in the health care system and the notion that inefficiencies in government will be rooted out. Um, yeah, okay. In an afterthought, this:

Finally, if these sources were not sufficient to address the funding requirements of the six recommendations presented, new revenues would have to be considered.

No kidding. More babble about fairness and protecting the less fortunate follows before concluding with dire warnings under the label “The Cost of Inaction”:

If the United States Congress decides that fundamental change in health care is either too disruptive to the economy, too complex, or too controversial and defers further action at this time, the Working Group fears that the cost of this inaction to American families goes beyond dollars and cents.

A do-nothing response today will merely delay this impending crisis for others to tackle at a later date, at which time the size of the problem—the cost of inaction—will be much larger.

The absurdity and lack of self-awareness is painful. Must. not. type. the words. Social. Security. Too late.