Ron Wyden's national health plan bites the big one

Ron Wyden from Oregon is introducing his healthcare plan. Below is why this plan bites the big one.

1. It is payroll based. The funding comes from companies that now pay for healthcare for their employees. How does that improve anything? This is part of companies employee expense and encourages them to send jobs overseas to avoid paying that expense. Those who make money by owning things don't contribute to the program - and that is over half personal income.

2. the profit motive. The administrators of the plan will be private healthcare companies. Their idea of efficiency is to tell you you're not covered when you get cancer. There is a fundamental conflict between profit and healthcare. The only way they make profits is to squeeze doctors and nurses, and deny healthcare to clients.

•  tip jar or spitoon, as you wish

  n/t

  by 2liberal on Wed Dec 13, 2006 at 10:50:55 AM PDT

  •  He's my Senator,

    and I didn't know this, I did know he had a plan in the works, but not any details, so thinks for posting this. I hope that this will be seen as a start, to get the discussion going, I can't see how a plan in this format will be adopted, we do need a national plan, but one administered by the government, not sure how funded though.

    by ichibon on Wed Dec 13, 2006 at 11:11:24 AM PDT

•  Hmmm....

  Wyden is my senator and I usually think he walks on water, but this plan is not so good.  Its a start, I'll give him credit for that, but its not going to work in this format.  Back to the drawing board, Ron.

  by AmyVVV on Wed Dec 13, 2006 at 10:52:42 AM PDT

•  Wyden's usually pretty cool...

  ...but...is he on something?

  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.

  Right. So my employer is going to just give me a big raise because there's universal health care? Obviously, this guy doesn't know my boss very well.

  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.

  Right, because most companies are willing to add yet another expense to their bottomline when they can just outsource the jobs to somewhere that doesn't have this legislation.

  I'm not a perfect scholar on world government, but aren't most foreign "universal health care" plans supported by taxpayers, people like you and me?

  by Our Man In Oregon on Wed Dec 13, 2006 at 10:56:32 AM PDT

  •  The wages would be taxed

    wouldn't they?  

    by UneasyOne on Wed Dec 13, 2006 at 11:02:24 AM PDT

    •  He proposes an adjustment to the tax code...

      ...to ensure that "increased wages" from this "2 year period" wouldn't bump you out of your tax bracket. And, you're right, the wages would be taxed as regular income. So, it's a double whammy: I'm getting a raise, but I have to spend it on health care, and the Government wants their 28 per-cent.

      Increases in premium payments for individuals and families would be offset by higher wages and subsidies provided under the plan, the report said. As an example, Wyden cited a worker who earned $60,000 last year, and received about $12,000 worth of health care coverage.

      The worker's health insurance would be terminated, but his salary would increase to $72,000, which would cover his health care coverage. The plan would bar workers from buying a "bare-bones" health package and pocketing the savings, Wyden said.

      "You can't take your $9,000 and go to Hawaii," Wyden said, adding that the tax code would be adjusted so that workers who earn more money would not be thrust into a higher tax bracket.

      So I'm going to get a $12,000 raise, but I have to spend that $12,000 on health care? So I'm not actually getting a $12,000 raise, am I?

      Here's a solution to "universal health care": increase the Medicare tax and expand that system into a universal health care system, and consolidate with the VA hospital system, and leave private corporations out of the loop. If you've got a problem with paying more taxes to receive universal health care, move to Canada.

      Oh, wait, they have the same thing. Nevermind. Did I mention that several European countries do as well? And that tax rates there are higher, but people are quite okay with this?

      by Our Man In Oregon on Wed Dec 13, 2006 at 11:15:16 AM PDT

      •  Or, downthread, even better...

        ...add it as an income tax to hit those people who live off their investments.

        Of course, there's still the issue of how to pay for medical for the homeless/unemployed/etc, but that's hopefully going to be addressed.

        by Our Man In Oregon on Wed Dec 13, 2006 at 11:18:49 AM PDT

      •  The purpose of this convoluted crap

        is to keep the insurance companies happy.  Doesn't please me at all.

        by UneasyOne on Wed Dec 13, 2006 at 11:37:50 AM PDT

        •  That's my take on it...

          ...anything short of a universal taxpayer-funded system that combines Medicare/Medicaid/the VA hospital system into one cohesive package that EVERYONE qualifies for is not a universal health care system.

          Health care should be something funded by taxpayer dollars for everyone in the United States (legally, that is). I'm not a fan of bigger Government, but this is one of those cases where private corporations should take a hike.

          Insurance companies are frauds, through and through, that exist to make money.

          by Our Man In Oregon on Wed Dec 13, 2006 at 11:49:14 AM PDT

      •  Not to mention the payroll tax

        Which is calculated before any deductions are taken.

        I asked on the other diary if it would be OK to take my $9,000 in savings and use it to fly to Thailand for surgery.

        I don't get what problem, exactly, this proposal is meant to solve.

        by elfling on Wed Dec 13, 2006 at 11:54:24 AM PDT

        •  I want to take my "raise" and go to the Bahamas..

          ...as a de-stressing trip, on the advice of my medical practitioner, who says I need to "lighten up". Is that allowed?

          As to "what is this supposed to solve?", it's looking like it's supposed to absolve the employers of that pesky "we should pay for employee health coverage" problem that plagues their bottomline.

          by Our Man In Oregon on Wed Dec 13, 2006 at 11:59:08 AM PDT

          •  Well,

            They're not actually obligated to now, if they don't want to.

            by elfling on Wed Dec 13, 2006 at 12:21:19 PM PDT

            •  Hmm...good point... n/t

              by Our Man In Oregon on Wed Dec 13, 2006 at 12:26:45 PM PDT

      •  Not fair

        it's not a raise in the traditional sense, so it's not right to say what you say about "have to spend it on health care." You gotta fix that.

        by Little on Wed Dec 13, 2006 at 11:58:05 AM PDT

        •  I'm not sure...

          ...I completely understand that. My understanding, from reading this press article about a senator's speech on a proposal he came up with, is that, in this example:

          I was making $60,000, now my employer is going to give me the $12,000 he would have spent on me, now I'm making $72,000. This counts as a raise, in my book, as a raise being defined as "to increase the level of something".

          But, now that I'm making $72,000, the Government still wants their income tax percentages, and I have to, according to the article, spend my booty on the health care that my employer was paying for in the first place.

          Unless he's proposing that the supposed $12,000 be placed in a Flexible Spending Account, which is untaxed, to be used for medical purposes. I'm not seeing that in the article about the announcement of the proposal.

          by Our Man In Oregon on Wed Dec 13, 2006 at 12:05:09 PM PDT

          •  c'mon, are you saying that's a "raise"

            like anyone would think of a raise? a friggin raise is the increase in salary you get for good work or time served - not some samount that suddenly falls in your lap because of  tax structure change. Jesus, an you not see a difference in that?

            by Little on Wed Dec 13, 2006 at 12:17:12 PM PDT

            •  Hm, in that context...

              ..you may be right, given as this "raise" is limited to a 2 year period of time.

              I doubt it would be a lump sum payment, but probably an averaged amount over the two year period, which you would then, according to this article about an announcement of a proposal, be required to spend on health care. After paying income taxes on it. Unless I'm reading this wrong.

              by Our Man In Oregon on Wed Dec 13, 2006 at 12:24:48 PM PDT

              •  Well, I'd like to trust that Wyden knows

                this is an unfinished (article about an announcement of a proposal) plan.

                by Little on Wed Dec 13, 2006 at 12:32:12 PM PDT

                •  There's a PDF of the complete proposal

                  available at http://www.standtallforamerica.com/

                  166 pages.

                  by elfling on Wed Dec 13, 2006 at 12:34:58 PM PDT

              •  Even if deductible

                (And according to the website, it would be)

                you'd be facing payroll tax on the increased sum according to current law.

                Current total payroll tax (divided between employer and employee) is roughly 16%, and 16% of $12,000 is nearly $2,000.

                by elfling on Wed Dec 13, 2006 at 12:33:53 PM PDT

        •  Would they guarantee

          that everyone could get the healthcare they need -- strong, comprehensive coverage -- for whatever that amount is, which will probably vary wildly from employer to employer? No? Back to the drawing board....

          by anastasia p on Wed Dec 13, 2006 at 12:08:26 PM PDT

•  Spot-On Analysis

  The BIG gap here, in my eyes, is that there is no incentive for private companies to cover the sickest patients. The people who will MOST NEED healthcare get kicked to the curb.

  by jpspencer on Wed Dec 13, 2006 at 10:58:00 AM PDT

•  Fair Flat Tax

  A year ago, Wyden introduced his "Fair Flat Tax" proposal, and I was similarly unimpressed. I'd really like to see more innovative proposals from the Democrats.

  by darrelplant on Wed Dec 13, 2006 at 11:02:28 AM PDT

  •  no, that's a winner

    I think the fair flat tax is a stupendous plan. It's growing in currency on the Hill, as well. People generally like it. Your concerns related to how much deficit it pays off misses the point, I think. It's not a deficit reduction plan; that's merely a side benefit.

    But I agree, on first read I don't think much of the health plan...

    by torridjoe on Wed Dec 13, 2006 at 12:04:11 PM PDT

    •  The entire "flat tax" idea is bad

      In order to have a "flat tax," you have to flatten- decrease taxes on the top brackets which has to be made up by increasing on the bottom brackets. But of course, you can't plunge them into poverty so it ends up being an anchor on the middle class, which will all see a tax increase. It's a non-starter.

      by anastasia p on Wed Dec 13, 2006 at 12:10:14 PM PDT

      •  no, that's not what this is

        the term "flat tax" is really a misnomer for this plan. Go read the plan first...
        http://wyden.senate.gov/...

        by torridjoe on Wed Dec 13, 2006 at 12:19:18 PM PDT

        •  Fake Flat Tax

          Sure, it's not actually a flat tax in the Steve Forbes sense, but Wyden uses the term in the name of his plan to get attention for it. It's sort of like how the Bush administration calls a program to pollute the air the Clean Skies Initiative. Deceptive marketing, it's a great start. I think it's a misnomer, too, but that's what Wyden himself was calling the plan.

          And that was the trouble with Wyden's plan as I read it last year. It had those same types of weasel words and deceptions all through it.

          As I pointed out, it claimed to be reducing the deficit by $100 billion. The plan only reduced the deficit by $20 billion in any given year. The way his staff calculates that, that's $100 billion in deficit reduction in five years, but the deficit is calculated on a year-to-year basis. You can't reduce the deficit over a period of time. That's simply misleading.

          I understand that Wyden's plan isn't a debt or deficit-reduction plan. That's part of what's wrong with it. The other part was that all of the numbers were very sketchy.

          We need to address the enormous economic hole the Bush administration has dug. We also need to address the inequities in the current tax system. There aren't going to be a lot of opportunities to get revisions to the tax code through. Both of those issues need to be dealt with. Relying on a general uptick in the economy that may or may not come (which is what I was told by Wyden's staff was the plan for dealing with the debt) is simply waiting for the ponies to arrive.

          by darrelplant on Wed Dec 13, 2006 at 01:26:52 PM PDT

•  Single payer or bust

  I will not support any plan that lets the HMOs take their 30% cut.  Period.

  by UneasyOne on Wed Dec 13, 2006 at 11:04:04 AM PDT

•  Last 6 months of life

  I remember reading that some wildly disproportionate percentage of healthcare spending is spent in the last 6 months of life.  IOW, operations and hospital stays for very old patients.

  I had a personal experience with this last year when my mother, who has dementia and is 85, was referred to a cardiologist and the cardiologist wanted to do open heart surgery to put in a new valve.  Its a $50-60,000 operation.  Medicare would have covered almost all of it.  

  As of now, my mother is supposed to be still "thinking about it."  A person who doesn't remember 5 minutes later that the doctor she saw is a woman is "thinking about" having surgery.  It was really like the decision was up to me and I couldn't see putting her through open heart surgery when no one would tell me what to expect from the outcome because its so risky.  The doctor did get to do a heart catheter as a test and that was $10,000 billed to Medicare of which they paid $9,000 and my mother paid the rest, which I think was a disservice to her.  It was for diagnostic purposes and only confirmed what all of the earlier tests said.

  But I know other people with elderly widowed mothers with dementia and they're all for doing every possible surgery or treatment.  They're going to do everything possible, spare no expense, if a doctor is recommending it.  So, how to get a handle on healthcare spending and make it possible to cover everyone when the issue of enormous expenditures on the very old is SO difficult?  

  by Lois on Wed Dec 13, 2006 at 11:05:26 AM PDT

•  Just called Wyden's office

  Health care staff is out to lunch. No, really, they're out to lunch. they're goin to call back.

  by Little on Wed Dec 13, 2006 at 11:07:54 AM PDT

  •  David Sirota's diary

    http://www.dailykos.com/...

    Take what he says into account:

    I want to be clear - I'm sure there will be questions and concerns about Wyden's exact proposal. It's probably not a perfect bill, and it is not a traditional single-payer system that I and others have advocated for. But there is not going to be a perfect silver-bullet solution to the health care crisis - and the fact that we now have a U.S. Senator preparing to use the new Congress to force a real debate on universal health care is a major step forward.

    by Little on Wed Dec 13, 2006 at 11:22:35 AM PDT

•  This is a stupid plan

  It seems obvious that the "problem" this "solution" addresses is not how to provide high-quality health care to everyone in the country, but how to give employers some cost-certainty and how to throw billions of dollars at the for-profit insurance industry.

  It's like a voucher plan, only worse because employers appear to be some kind of middle-man.  And if it's so great, why not switch Medicare patients over to it?

  Oh, right, because Medicare actually works better than private health insurance.  But we'd never want to put the whole country on Medicare.  That would be socialist.

  by Pesto on Wed Dec 13, 2006 at 11:07:57 AM PDT

•  I really don't like setting it up as payroll tax

  Why should only people who work for a living pay into the plan? Shouldn't people who live off passive investments also contribute?

  It should be an income tax, not a labor tax.

  by elfling on Wed Dec 13, 2006 at 11:10:50 AM PDT

•  it's better than the Mass. plan

  It's not single-payer, but it has the end goal of insuring everyone.  As long as that's the level of the conversation, the result will be positive.  Essentially he's trying to take the existing monies already spent on health care and create efficiencies through cost containment, and distribute it to all.

  The details are not great, but he's thinking bigger than anyone else out there.

  by dday on Wed Dec 13, 2006 at 11:15:15 AM PDT

  •  How does it help?

    I'm honestly trying to follow this.

    What about people who aren't employed? What about people whose employers don't pay anything towards their health plan? What about the self-employed?

    Will insurers be required to serve anyone who applies for coverage at the same rate, without asking about health history?

    by elfling on Wed Dec 13, 2006 at 11:57:05 AM PDT

    •  ezra

      key graf from the best guy in the blogosphere on health care.

      Meanwhile, an individual mandate would be implemented, forcing every American to purchase one of the options offered by their state's newly formed Health Help Agency (HHA). The HHA's will have a menu of private insurance plans, all of which must provide coverage equal to or better than the Blue Cross Blue Shield Standard Plan used by Congress. All plans will be community rated by the state, meaning an end to adverse selection and preexisting condition problems. The only acceptable variables for price will be geography, family size, and smoking status. Subsidies will be offered up to 400 percent of the poverty line, will full coverage provided to those below 100 percent. Employers will contribute through a set equation related to business size and yearly profits. There's quite a bit more, but that's the basic outline.

      The evaluation of the plan predicts that under it, over 99% of Americans would be covered (reducing the uninsured from 47 million to under 3 million) and that we'd save $1.4 trillion dollars over the next decade.

      It's not perfect, but it's a major step.

      by dday on Wed Dec 13, 2006 at 01:34:49 PM PDT

•  A good start

  Universal and portable. Simply introducing those words to Congress is progress. It could certainly be improved and refined but here's hoping the introduction of this proposal encourages people to take it more seriously and propose those improvements.

  by Daaaaave on Wed Dec 13, 2006 at 11:16:29 AM PDT

•  Added tag "Health Care"

  The form with the space is the canonical/preferred form according to the tag project on dKosopedia.

  by elfling on Wed Dec 13, 2006 at 11:58:16 AM PDT

•  I did find more details

  http://www.standtallforamerica.com/...

  However, I'm still skeptical.

  by elfling on Wed Dec 13, 2006 at 12:22:31 PM PDT