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To take employers out of the economic loop, while seemingly attractive to many, would be a major mistake. They are, for better or worst, a necessary and positive force in this complicated economic checks-and-balances matrix of health care market and government forces. I know they want out. Hell, everybody wants out. But without their skin in the game, a major constraint on our considerable national appetite for anything health care will be lost.

I appreciate your comments on Senator Wyden’s Healthy Americans Act, but there are just a few points that I’d like to clear up.

“Turning the benefit into wages will also generate new taxes for the federal government to channel into subsidizing those who can’t afford to buy insurance in the private marketplace.”

Technically, yes, the cash-out would be taxable. The funding for the subsidies, though, would come from “Employer Shared Responsibility Payments,” which are made by all employers, as well as from savings gained through the elimination of several federal bureaucracies (e.g., Medicaid). The new revenue, however, would not come from the middle-class. Their increased income is off-set by a new health care standard deduction — and a new per child deduction — that is phased-in and phased-out by income, and is done so in such a way that benefits the middle-class.

“[Middle-class workers will] get more money in their paycheck, but probably about the same or less than what it will cost them to buy comparable insurance in the private marketplace. So there’s no benefit there. However, they’ll also face a higher tax bill because they fell above the line getting subsidy. So for many middle class voters, this will look, smell and feel like a tax increase because it will be one.”

Again, as I mentioned above, there really will be net saving for most middle-class families. More importantly though, why wouldn’t someone prefer this system, even if they did have to pay the same amount as they do today? The plan would enable someone to take their insurance with them from job to job – or keep their insurance if they lose their job. Also, someone could no longer get priced-out if they become sick. In our view, this new security would be a significant gain for millions of American families.

Alec,

I have not costed out the details of the standard deduction/child credit. I have no doubt that a progressive like Sen. Wyden would structure the plan to benefit most Americans. But the operative word in your post, and in my last sentence is “most.” The fact that many upper middle class voters would probably not benefit from the bill makes it susceptible to demagogy, from either the right or left. Doesn’t make it bad. Just makes it politically vulnerable.

As far as Fred’s comment goes, I love the idea that someone still actually believes that corporate involvement as insurance providers (by either self-insuring or buying insurance) has been a constraint on overall system costs. Some individual companies, usually quite large, have been successful. But as a systemic solution, I think we have a few decades of experience now to suggest that it represents a minimal constraint on those who would run up health care costs because it is in their interest to do so.

[…] on the topic, here are a few more opinions from previous posts: - Ron Wyden (D-OR) believes the time is now to end employer-based healthcare. - Dr. Richard Fogoros, author of Fixing American Healthcare, […]

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