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Sen. Ron Wyden leads bi(tri?)partisan group of 5 Ds, 6 Rs, 1 I in fighting for same old government-controlled health care

March 6, 2008

Senator Ron Wyden (D-OR), the primary sponsor of bipartisan Senate Bill 334 (the “Healthy Americans Act”), has spent the last few days on the stumping for his plan to “fix” America’s health care system.

Burdened with the mouthful of a title "A bill to provide affordable, guaranteed private health coverage that will make Americans healthier and can never be taken away,” S. 334 includes an ‘individual mandate,’ or legal requirement that every individual purchase at least a minimum amount of coverage, though enforcement is left up to the States, which are directed to come up with a means of ensuring that the uninsured are penalized.

Interestingly, Sen. Wyden uses this ‘individual mandate’ portion of the bill to present an olive branch (or a level of government-backed legitimacy) to practitioners and recipients of holistic and spiritual medicine, as S. 334 officially excuses people who are “opposed to health plan coverage for religious reasons, including an individual who declines health plan coverage due to a reliance on healing using spiritual means through prayer alone” from compliance with the mandate.

Individual states are also allowed to determine whether complying with this mandate would constitute a “hardship” for impoverished families and individuals, and to make allowance for them.

One aspect of the “Healthy Americans Act” that is purportedly different from some of its ‘universal care’-touting predecessors is that it would remove the employer link in the health coverage-provision chain. The Act would mandate that health insurance companies provide coverage to insured individuals directly via “Healthy American Private Insurance (HAPI) Plans,” instead of through employers as part of an employee-benefit plan.

The money ‘saved’ by employers as a result of their being relieved of the need to pay for employees’ health care would be passed on to workers in the form of increased (and untaxed) wages, which workers would then be expected to use for purchasing the required health coverage.

This part of the plan at least makes minimal economic sense. After all, the amount of compensation that an employer provides an employee encompasses every expenditure necessary to employ that worker, from payroll taxes, to health care, to pension, to actual wages.

If the form of a benefit that the employer is providing as a portion of that compensation package is changed – such as, for example, from the form of enrollment in a health care plan to the form of increased wages – but the overall cost of that expenditure remains static, then, as far as the employer is concerned, there has been no change in the amount of that worker’s compensation.

The major problem with this arrangement comes into view in the next step, which some media – either through a misunderstanding of the plan, or a willful attempt at obfuscation – conflated with the ‘direct enrollment’ portion of the plan. As the Los Angeles Times summarized it, “Over time, employers would to pay the federal government a health insurance contribution. The legislation would require individuals to use the funds contributed by employers to purchase through state purchasing pools private health insurance...”

The first sentence of that passage reveals the source of funding for this “Healthy Americans” program – and its juxtaposition with the portion about employees receiving higher wages in exchange for their use of those wages to secure ‘private’ health care reveals a misunderstanding (or refusal to acknowledge) the fact that this plan, just like all of the plans before it, is to be built on the backs of America’s employers, who will be expected to pay the federal government an increased payroll tax on top of what they are already shelling out for total worker compensation.

Of course, anybody with even a casual understanding of business or of economics will know that the first response by businesses to this increased cost of employing their workers will be to recoup that lost capital by cutting wages or workers.

It’s a pity that so few legislators understand such a basic level of business, despite the fact that they have a hand in running the multi-trillion-dollar U.S. government.

Further, though the entire set of talking points that Sen. Wyden and his fellow sponsors of S. 334 pay lip service to the bill’s enforcement of “private” insurance, rather than government-run ‘universal’ care, this bill is, at its heart, simply another run-of-the-mill government takeover of the health coverage system via regulation and redistribution.

As the plan was summarized by CQHealthBeat, “The federal government would collect premiums paid by individuals and contributions from employers through the tax system and distribute the funds to health insurers.”

So. Despite all the fancy language about private enterprise and direct consumer contracts, Sen. Wyden’s “Healthy Americans Act” is, at its core, just another government redistribution program built on the backs of the country’s productive employers. Further, the "private insurance policies" Americans would sign up for under this bill are nothing of the sort. Though they come -- by law -- from private insurance companies, the government writes the policies that they force the companies to offer and the people to buy, thereby eliminating all choice involved for anybody.

It is time for America’s legislators to stop repackaging the same nonworking, redistributive, government-run programs again and again, and to finally offer meaningful change that will help decrease the cost of health coverage and health care by increasing competition and choice, and by reforming a system that causes medical practitioners to carry so much malpractice insurance that they cannot afford to serve in areas that so badly need the services of qualified medical personnel.

S. 334, Sen. Ron Wyden’s “Healthy Americans Act,” is patently not that innovative solution to our current health care situation. Instead, it is the same old government-run program wrapped up in a new title, with a few more unworkable wrinkles.

It is to be expected that the five Democrats and Sen. Lieberman, who is far more liberal than many Republicans who only pay attention to him on the war realize, will go for such an old, tired plan as this.

Shame on the six Republicans who are going along with it (it was seven, but Trent Lott retired -- thank goodness). Will Sens. Lamar Alexander, Chuck Grassley, Robert Bennett (who is touting his support of this plan on the front page of his website), Mike Crapo (who previously stepped to the plate to defend his fellow Idahoan, Larry Craig), Norm Coleman, and Judd Gregg ever learn?

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