Thinking Big on Health Care

California's Senate President Pro Tem Don Perata released a health care plan yesterday that he will propose in the coming year. It creates a state-run pool of money, provided by employers and employees, that would be funneled into existing private insurance plans. Essentially everyone in the state who works would eventually be covered. There aren't many details beyond that.

This is thinking small. Working within an already broken system will not produce a positive result. The money is already spent on health care to create a universal, single-payer system, and it's time to have that conversation. In the past I've been somewhat happy with these Massachusetts-style forced-health insurance plans, because they at least set covering everyone as the end goal. But using the same private insurance structure keeps in place the same inefficiencies that have made the American health care system the costliest in the world, without being the most effective. And as long as you have for-profit companies in the system, as long as you make the tacit argument that health care is a privilege and not a right, those inefficiencies will remain.

I am much more heartened by Ron Wyden's bid for universal health care for all. Wyden understands that forcing employers to provide health care makes them less competitive in a global economy, and has led to them cutting back as far as they can, so that the coverage they do provide is insufficient to prevent illness and disease before it occurs. But he also understands the difficulty with government bureaucracy (and particularly the perception of it). So he threads the needle with a hybrid idea that is both smart and good for the economy:

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.

Called the "Healthy Americans Act," the plan would cover all Americans except those on Medicare or those who receive health care through the military.

It 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.

At Wyden's request, the Lewin Group, a Virginia-based health care consulting firm, reviewed the plan. The consultant said the plan would reduce health spending by private employers by nearly three-quarters and would save $1.4 trillion in total national health care spending over the next decade.

Taking health care out of the grip of employers will allow workers to be more flexible and more entreprenurial. I can't tell you how many people I know who won't quit their job because of the health insurance they're getting. They don't want to slip into the trap the other 46 million Americans without insurance have.

The full legislation is here and I hope Don Perata and everyone in California concerned with the coming crisis of health care read it. It's time to think big, not small.

UPDATE: Wow, so David Sirota gave his piece on the Wyden proposal the exact same title. Sirota's also right that Wyden's solution is not single-payer. But it's a big step in the right direction, outside of the muddled middle of the Massaschusetts option. (alliteration)