Sen. Ron Wyden: No 'Choice' in Senate Health Care Bill

Sen. Ron Wyden, Democrat of Oregon, took on what he considered to be one of the fundamental problems in the way health insurance is provided.

But late Thursday he withdrew an amendment aimed at giving workers more health insurance choices after fellow Democrats on the Senate Finance Committee, which is working on the Senate health reform bill, panned his measure, The Oregonian newspaper reported.

"This amendment is an attempt to inject real reform in the bill," the newspaper quoted Wyden as saying. "Where in this bill does it give choice? I can't find it in this bill, colleagues."
Among other things, critics said the plan would weaken the bond between workers and employers that provide health insurance, The Oregonian said.

Roughly 176 million people receive health insurance through their employer. The way the system now works, your employer chooses one or more insurance plans and pays a good deal of the premium. Besides getting subsidized health insurance, you also enjoy a tax benefit: the employer's contributions for health insurance are deducted from your gross income, meaning you pay tax on a smaller amount. Premiums paid by people who have to buy their own insurance are not tax deductible.

So, employer-provided health insurance is a bonus from the income tax point of view. But from a choice point of view, it's limiting. You have to take what your employer offers or purchase insurance on the open market, likely at a much higher cost because you would lose the tax break and also the benefit of risk pooling.

Wyden's Free Choice amendment said workers could stick with their employer's plan or, in certain circumstances, receive a voucher, buy a policy through a proposed insurance exchange and get the income tax break on the premium amount. As Wyden explained at a meeting at the Tax Policy Center earlier Thursday, "Since a typical family of four spends about $14,000 in health insurance premiums, they would receive a tax cut for shopping in the marketplace where they would be rewarded for shopping around for the best policy." Wyden suggested that the payment might take the form of a progressive tax deduction from the individual's taxable income.

"My amendment will meet President Obama's two guiding principles for health care reform," he told the group. "One, it gives individuals a choice. They can keep their current policy or they can choose an alternative from the marketplace. Second, it creates competition in the insurance marketplace."

Wyden said the main focus of his plan was to give workers the ability to choose their insurance policy. As Wyden put it at the Tax Policy Center meeting, "millions of Americans have no choice at all over their insurance policy because their employer makes that choice for them."

At the time, Wyden was optimistic about his amendment's chances for success. But as he prepared later to withdraw the measure, he told his colleagues, "We have stripped this bill of choice and competition."