In “Health Care’s Odd Couple,” Ezra Klein’s insightful piece in The American Prospect, he correctly points out that health care reform is impossible without bipartisan action. He’s also right when he notes that the bipartisan coalition of 12 senators assembled by Ron Wyden (D-OR) and Bob Bennett (R-UT) is moving in the right direction to achieve that goal. And finally, I couldn’t agree more that the Wyden-Bennett bill is more radical than anything that Obama, Clinton, or McCain have proposed on health care reform.
The only problem is that their solution won’t work.
The reason why is transparently obvious: If employers give their workers a raise equal to the amount they’re spending on health insurance today, that money won’t buy insurance tomorrow. The difference between that raise and the cost of insurance will be borne by consumers. Their employers, in contrast, will not have to spend a plug nickel more than they agreed to pay in year one. In essence, this is a buyout of their healthcare obligation similar to—although not the same—as the automakers’ buyout of their retiree obligations.
Of course, the Republicans, representing the employer class, would love to see everybody buy their insurance individually. In fact, the idea of fixing the amount of employers’ health care payments is also what’s driving consumer-driven care: They give you, the consumer, a fixed amount to put into your health savings account, and you have to pay more every year for health care.
Health care reformers from every corner of the political spectrum would like to move away from our employer-based insurance system, and that makes eminent sense. But there’s a right way and a wrong way to do it. Consumers should have the ability to buy their own insurance, or to choose among competing provider groups—as I propose in my book Rx For Healthcare Reform. But the money for them to do that must come from employers and the government, as well as from consumers, and employers must pay their fair share, rather than continuing to heap more of the burden on their workers.
By the way, even if the Wyden-Bennett proposal would save $1.4 trillion over 10 years, as the Lewin Group estimates, that’s a drop in the bucket. We’re expected to double the current $2.3 trillion annual cost of health care within the next decade. Yearly savings of $140 billion hardly make a dent in that. To achieve real cost control and real universal health care, we need deep structural reform in our health delivery and financing system.
