Wyden's plan does not open the exchange to all on day one, and why labor hates it

[ProSense]

He is repackaging a really bad plan and trying to use a public option to sell a plan to benefit private insurance companies.

Wyden's bill

Tax Treatment of Benefits: Under both approaches, the employer contribution for health insurance, including the voucher amount, is exempt from taxation except to the extent that they do not exceed the employer tax exclusion caps under the Act (i.e., $8,000 individual, $21,000 family). However, if the voucher amount exceeds the cost of insurance purchased in the exchange, the difference is taxable income to the employee. The employer will continue to be able to deduct the full amount of their costs including voucher payments.

<...>

More Choice for Workers: Workers who don't like their employer plans can choose to go to the exchange and choose any plan available through the exchange. If their employer currently provides health coverage, the workers will get a voucher equal to the money their employer currently pays to help pay the cost of an exchange plan. The voucher amount would be excluded from the employee’s income and the cost of the voucher would be deductible by the employer. If the workers choose a plan that costs less than they have currently, they get rewarded with extra money in their pockets.

More Choice for Employers: Employers also have more choices: they can give their workers the ability to buy health coverage in the exchange or bring their entire group to the exchange and get a discount. This choice could be phased in for the mid-sized and large employers over a few years after the exchange gets going. Employers with good health plans will be able to maintain their plans because they will offer their workers better value. Employers with high cost, low value plans can cut their costs by letting their workers go to the exchange.

Cost Containment: The plan would reward consumers for selecting more efficient lower cost plans by enabling them to retain the full amount saved by electing a lower-cost option.

Transition to the Free Choice System

Year 1— People who are currently in the individual market plus small employers with up to 25 workers and the uninsured have access to the exchange.
Year 2-- Add employers with up to 100 workers to the exchange.
Year 3 – Open exchanges to all employers.

Offset – The Lewin Group has estimated that the Free Choice proposal would reduce national health spending by $360 billion over the next 10 years and this reduced health spending would reduce the amount of revenue foregone through the health tax exclusion by $129.8 billion over that 10-year period. Thus, the amendment should raise revenue. It should complement and enhance the “stick” provided by the excise tax on high cost plans by providing a “carrot” to encourage selection of low cost, high value plans.

Aside from being taxed and having one's wages reduced, what happens if the voucher isn't enough to cover the cost of insurance? Not only is this leaving employees exposed, which is why labor hates it, the time table is not "day one."

In fact, the HELP bill exchange is available through employers with up to 20 workers in year one, and the House bill is up to 50. Even Baucus' bill opened the exchange to employers with up to 50 employees.

If Wyden has a plan that opens the exchange to all on day one, he needs to produce it and have it scored.

[lumberjack_jeff]

1. Your post is not clear.

If the employee can purchase coverage cheaper than the employer does, the employee gets to keep the change after buying coverage from the exchange.

What's wrong with that?

It also cures the main problem with all the bills being currently considered - perverse incentives. The subsidies are currently set up so that people will choose the most expensive coverage among equivalent plans.

[ProSense]

2. That's one scenario

What about all the others: being taxed, wages reduced, potential that voucher doesn't cover cost, etc. The system is designed for abuse. Speaking of employee keeping the change: what measures will be in place to ensure that the vouchers are going to be used to purchase appropriate health coverage?

I'd rather see the public option be gradually open to all, starting with the business with up to 50 employees, Medicare be open to all or single payer, than this bizarre voucher system.

[lumberjack_jeff]

3. I don't read anything there which suggests reduced wages.

But yes, if the voucher is more than the coverage costs the difference becomes taxable income. If the voucher is less than the cost of coverage, the employee would have to come up with the difference.

And some mechanism for verification that a person has coverage is implied in all the bills.

I don't see anything wrong with any of that.

[ProSense]

4. It's a recipe for abuse and fraud, and it's unnecessary because

there is a better solution, including a better time table, simply open the current exchange to more companies now and over time.

[Oregone]

7. LOL. If the voucher doesn't cover the cost, they are no worse off sticking with their original plan

The key here is that the employees can look at the scenario and make that judgment themselves. At least give them that option (may some will want to pay extra and get a better exchange plan--thatd be their right)

Opening the public option as a choice for employers only leaves employees shit out of luck if their employer chooses private only.

[DrToast]

11. Not clear? It's complete bullshit

Wyden's free choice amendment doesn't involve all that stuff from his bill.

[Oregone]

13. The Resistance to strengthening the public option is unfathomable

And citing his original bill is irrelevant. Very strange days indeed.

[ProSense]

14. "Wyden's...amendment doesn't involve all that stuff from his bill" What?

This is the amendment proposed in the Finance Committee, and linked to in the OP: Wyden Amendment #C1 to Senate Finance Chairman’s Mark


Is there another amendment?

[Oregone]

5. It opens the exchange on an INDIVIDUAL level, and provides a cash incentive to choose it

In the case that the employer simply offer a cheaper alternative as a second choice, the employee is no worse off than before, and now has an opportunity to save money if they choose.

Its win-win all around.

Are you opposed to allowing individuals to choose themselves?

[ProSense]

8. Among all the obvious things you ignore, why do you keep ignoring the time table? n/t

[Oregone]

10. Allowing individuals to choose the PO themselves is a much more important part of this bill

I see that as moot. Every employer could choose the public option on day 1, as far as I'm concerned, and workers could still be screwed due to circumstances beyond their control. This provides a means for the employee to get around that, and delivers a cash incentive to do so.

[ProSense]

15. "Every employer could choose the public option on day 1" Are you reading the same document:

Year 1— People who are currently in the individual market plus small employers with up to 25 workers and the uninsured have access to the exchange.

[Oregone]

16. Please read the entire sentence. Its a hypothetical

"Every employer could choose the public option on day 1, as far as I'm concerned, and workers could still be screwed due to circumstances beyond their control."

The strength of the amendment is allowing the workers to choose a cheaper health care option than what their employer offers, and getting an incentive to do so.

[karynnj]

6. I would imagine that the biggest problem is that it could hurt people happy with

the insurance they have from their employer. In addition to a large majority of people saying they favor a public option being available, universal healthcare, there is also a large majority who say they are happy with what they have.

What this will do is encourage many young, healthy "invincibles", to pick a bare bones plan on the exchange and take the cash. Now, there will be a few who live to regret that, but it is their choice and not the problem I see. The problem I see is what then happens to the smaller, on average older and less healthy people remaining in the pool for the employer provided plans? One possibility is those rates go up because the (and then the vouchers go up encouraging more to leave) and the cost to the employer increases. The more likely possibility is that the benefits go down or the deducibles and co-pays go up.

Now, you ideologically may like that because it leads to the extinction of employer plans, polling shows that more than half the people in the country do not like that. (I assume because tkis is personal, the intensity of how much they care about this is likely higher than the altruistic "yes" on universal care.) I think this would be a poison pill if passed, but it won't be.

[Oregone]

9. How? They have the right to keep what they have

There is also some sort of risk adjustment reinsurance pool the employers will participate in, though I don't see the specific details on that released (Id think this has something to do with protecting their remaining workers from a re-adjusted risk pool).

[SpartanDem]

12. You're right they could pick bare bones plan

they could also choose to pay extra for a better plan, but at least they and everyone else will have that choice.

[karynnj]

17. As I said, you need to think of the political impact of the

remaining people in the employer plan, who were promised that they could keep their plan, finding that this accelerated their plan becoming destroyed.

[t0dd]

18. Awww, we wouldn't want to dismantle the private insurance mafia

We better make sure if people are happy funding Angela Braly's new cadillac that they continue to do that. And we wouldn't want Obama to break a promise. Imagine the political impact! He hasn't broken any yet :sarcasm: