Note: This was supposed to show up at the ISIL Medical Freedom Channel, a week ago today. However, since that site is currently offline temporarily, it seemed appropriate to unveil it here at Rational Review, in order to maintain its timeliness. - SAT.

A new national healthcare plan was revealed this week, sponsored by Sen. Ron Wyden, a Democrat from Oregon. On first glance, it may appear to be just another variation on the Hillarycare model for socialized medicine, and in some ways it seems to be being promoted that way. However, this may be a case where marketing undercuts the reality, the way so many Hollywood films of recent vintage have done. (Who could have known how sensitive Adam Sandler’s characters in Spanglish or 50 First Dates could be … based on the same old slapstick shown in the previews?)

Is it possible to craft a program that can blaze a path toward a true reform in healthcare? Let’s find out, by examining the major ideas being brought forth in the Wyden plan. To begin with, let’s summarize (details below): The Good News: (1) The program focuses strongly on wellness and prevention as a paradigm for healthcare; (2) It stresses self-responsibility, and offers a way out of the “employee benefit” box; and (3) It pushes for “portability” and individual ownership and control of that wellness. The Downside, at least for many libertarians, is: (a) how many mandates there are for government involvement in making this happen, requiring compliance from many segments of society, including those same individuals and their employers; (2) the fullscale trampling of the Tenth Amendment, mandating state creation of local coverage programs and monitoring of the results; and (3) perhaps most significantly, the lack of mention of Medical Savings Accounts, or other methods for funding self-responsible wellness, as part of its prescription.

Aside from this, however, there’s a lot to recommend here. From the very first sentence, although the title is “Guaranteed Private Coverage,” the explanatory statement following it (in the summary document) reads, “Within two years of enactment States must create a system as outlined in the bill to provide individuals the opportunity to purchase a Healthy Americans Private Insurance (HAPI) plan that meets the requirements of the Act.” Notice how it says, “provide individuals the opportunity,” not “require” them to; unless this is just more politico-speak, there’s clearly some element of choice here.

On the other hand, the next section DOES use some coercive language: “Adults (over age 19, U.S. citizens, not incarcerated) must enroll themselves and dependent children in a plan offered through the state-wide Health Help Agency (HHA) [emphasis added] unless … [a laundry-list of specific exceptions].” It also then calls for a penalty for non-compliance, based on the period of such non-compliance times the average monthly premium for an appropriate plan, plus a 15% penalty, payable to the given state’s HHA.

This seems coercive, and indeed it is; however, given the incentives for getting on board with the program, this might be considered almost forgivable. Note that the Senator does not mandate all of this in a vacuum. He begins by promoting the idea (long overdue, and presented several times in this space of late) that employers should stop providing health insurance for their hired hands, and should instead reallocate their funding of current programs to pay-raises, so the employees can do so themselves.

The catch is, those employees would then be expected to put that extra money into paying for their own health coverage, choosing among existing plans and those newly created under the program. The good news is, Wyden is encouraging self-responsibility for able-bodied, employable individuals, offering them an incentive to take charge of their own wellbeing. The bad part: As mentioned in the summary at the top, there’s no reference anywhere in the document to medical savings accounts, or to combining high-deductible coverage with an MSA, or permitting any unused windfall (provided the person has maintained proper checkup and screening appointments, and been found hale and hearty thereunder) to become one’s own “property” at the end of each year. Both concepts would not only allow for some intelligent decision-making for each of us, but would also enhance both cost savings and personal responsibility in the process.

There’s also a very strong precedent already in place, in the existing employee programs at Whole Foods Company: The owner no longer pays insurance premiums, but pays the deductible amount on the policies of his workers – at the beginning of each year, and directly into their hands, to do with as they choose, while they remain responsible for maintaining their own wellness by whatever means possible. If at year’s end, there is money left over, it’s the employee’s to spend as (s)he chooses. (Also, we might note, since this natural foods store-chain has both progressive and libertarian roots, one might think Sen. Wyden would already know of this program.)

As noted above, the Senator also would infringe further on the 10th Amendment to the Constitution, by mandating what each state should provide – “at least two plans that meet the requirements of the Act” – as well as in dictating what such plans may include: “(1) plans similar to the Blue Cross Blue Shield Standard Plan provided under the Federal Employees Health Benefit Program as of January 1, 2007; (2) plans with additional benefits added to the standard plan so long as those benefits are priced and displayed separately; and (3) actuarial equivalent plans to the standard plan.” States-rights activists might not buy into this idea – however well-intended it may be – yet that intention is pretty clean on its surface.

The Wellness Paradigm

On another very positive note, Wyden goes further than any previous plan has, toward a whole different paradigm for wellness, in specifying the range of the new plan offerings:

“In addition, plans must provide benefits for wellness programs, incentives to promote wellness; [and] coverage for catastrophic medical events; … create a health home for the covered individual or family; ensure that as part of a first visit with a primary care physician, a care plan is developed to maximize the health of the individual through wellness and prevention activities; provide for comprehensive disease prevention, early detection and management; and provide for personal responsibility contributions at the time services are administered except for preventive items or services for early detection.”

The gist of this is a much-needed shift toward wellness and prevention, and away from the current paradigm of maintenance and aftercare of diseases already past the “cure” point. For those who have been wondering when someone in an official capacity within the government would wake up to the need for this approach, Senator Wyden has stepped into that role.

In Subtitle D of the first section of his proposal, Sen. Wyden reveals a fine awareness of some of the deeper issues involved in our current healthcare crisis. This entire section addresses how Wellness Programs can be instituted, with the eventual goal of supplanting (or at very least dwarfing) most of the present systems altogether. He even uses the right language:

“Wellness programs must consist of a combination of activities designed to increase awareness, assess risks, educate and promote voluntary behavior change to improve the health of an individual, modify his or her consumer health behavior, enhance his or her personal well-being and productivity, and prevent illness and injury.” (Note once again the use of words like ” promote voluntary behavior change” … this is hardly the viewpoint that was presented in the Hillarycare fiasco!)

He also would mandate “discounted premiums” for those who “participate successfully in approved wellness Programs … including rewarding parents if their child participates in [one].” He then sets parameters for such “approved” status: ” [T]he program must be designed to promote good health and prevent disease, is approved by the HAPI plan, and is offered to all enrollees. Employers may deduct the costs of offering wellness programs or worksite health centers.”

Responsibilities

An entire section of the HAPI plan addresses the division of “responsibilities” (thereby setting it far apart from almost every other government program within this editor’s awareness). The requirements on individuals are simple: Enroll oneself and family in an approved plan, and pay the premiums required. If you wish to be subsidized for all or part of your premiums, you must turn in the proper paperwork, and keep the local HHA aware of any changing conditions or addresses. Otherwise, it’s up to you to pay your premiums and use the services as needed. (Here’s a chart showing the projected relative effect on various types of people in this plan.)

From employers, Wyden seeks an annual (relatively small, compared to paying health insurance premiums) administrative fee (based on the number of employees) and a transition from paying those insurance premiums, to paying workers more directly, so they can do so for themselves. (Companies above a certain size that aren’t now providing such benefits would be expected to find a way to begin paying their workers some sort of increase, or suffer rather large fines. Here, the details are somewhat fuzzy.)

Moreover, says Wyden in no uncertain terms, “Individuals own their medical records.” He wants us to start taking control of our own documentation, which is not all that burdensome, if we’re getting regular preventive care from a chosen set of healthcare providers. (This chart shows the relative effect on various levels of employer-status.)

As for the insurance industry, they don’t get the windfall they might expect from this. In order to participate (and if this were to go through, they’d basically choose between playing along … and going into another business), an insurer would be required, among other things, to:

“implement and emphasize prevention, early detection and chronic disease management; ensure wellness programs are available; demonstrate how provider reimbursement methodology achieves quality and cost efficiency; ensure a physical and a care plan are available to the individual; … [and] provide discounts and incentives for the parent if the child participates in a wellness program.” (The list is actually about three times that long.)

No free ride there, either. The aim is once again to promote self-responsibility, and to reward those who limit their effect on the healthcare burden. (Any insurance company that does not consider this plan a step forward should perhaps not be trusted as an insurer in the first place!)

The states, meanwhile (again, despite the fact that the federal government has no authority to make these demands?), would be expected to:

“designate or create a Health Help Agency; ensure HAPI plans are sold through the HHA and comply with requirements (at least two HAPI plans offered); develop mechanisms for enrollment and the collection of premiums; ensure enrollment and develop methods to check on enrollment status; implement mechanisms to enforce the individual responsibility to purchase coverage (not including revocation of insurance); and implement a way to automatically enroll individuals who are not covered and seek care in emergency departments.”

Furthermore: “States will continue to apply State law on consumer protections and licensure. States must continue a maintenance of effort so they are required to contribute 100 percent of what they spent on health services prior to enactment.” (This latter provision might fly in the short term, but would have to be expected to decrease over time, as individual state programs succeeded in cutting the overall outlay for health and wellness, as more of the private sector was allowed to do its job.)

And finally, the role of the Feds themselves is spelled out [paraphrasing here]: (a) fund insurance-premium subsidies; (b) establish a new “Healthy Americans Public Health Trust Fund” to feed with premiums and employer contributions (Wyden apparently believes in the “lockbox” concept that’s worked so well for Social Security); (c) create a tax credits system for employees and employers who comply immediately with the new programs (as well as for retirement coverage); (d) create a Healthcare Standard Deduction for all citizens (mitigating or offsetting taxes on money spent on your own wellness), based on the level of coverage taken on; and (e) generally getting out of the way otherwise.

Other parts of the deal

Wyden’s plan goes on to address (each as separate functions) such programs as “Healthy Start for Children,” “Better Health For Older And Disabled Americans” along with those addressing other issues – a stronger and more efficient Medicare system, a hospital quality improvement plan, and an end-of-life care program. Although each is certainly important, it is most laudable that he does not attempt to clump them together with his other ideas. As long as we separate the real problems of society from more ordinary concerns, and then target those big issues specifically and with directed effort, we have at least a chance of solving some of them without bankrupting the rest of the system.

For those who’ve been shut out of normal health coverage, or placed in untenable financial straits by high-dollar premiums, Wyden offers more assistance with his plan. He would require that plans offered through what he calls “Health Help Agencies” must include:

“coverage of preexisting conditions; guaranteed availability of coverage; guaranteed renewability of coverage; prohibition of discrimination based on health status; coverage protections for mothers and newborns, mental heath parity, and reconstructive surgery following a mastectomy; and prohibition of discrimination on the basis of genetic information.”

These are and should be entirely separate issues from the wellness of those who are presently both illness-free and without pre-existing conditions; how we deal with charitable or extreme circumstances should not be combined with how we move toward a society where the able-bodied assume greater responsibility for themselves. By lumping them somewhat into the same program, Sen. Wyden risks losing sight of the primary goal: increased wellness for the society as a whole, without adding chains to individual burdens. However, there is some indication that his program has defined its boundaries among its various aspects and targets, and that (much like the Cover Tennessee program of Gov. Phil Bredesen in that state) it intends to maintain those borders both fiscally and policy-wise.

Wyden also seeks to establish a baseline income-level, below which one would be eligible for total subsidy of such policy premiums, setting the current “poverty level” ($9,800 individual, $20,000 for a family of four) as that marker, with a sliding scale of subsidies extending up to the $40K ($80K per family) income-level. Again, by meshing a program that pushes people toward self-responsibility with one that subsidizes them directly, he tempts the fates to lose all perspective. Charitable work should not be conflated with pay-your-own-way and “hand up” ideas, lest both efforts be attenuated by the lack of clear intention.

Is this idea perfect? No, it still includes some very coercive features, which must be eliminated before it could truly become a self-responsible system. Does it address the major problems of the present healthcare mess? Yes, emphatically so. It also shows some promise for leading to a future where the vast majority of us are healthy, wealthy … and a lot wiser about what we do to our own bodies – that keeps them going longer, stronger and less in need of all that expensive “end-care” that is bankrupting us all. Senator Wyden is to be complimented on a very strong and extensive first step on this issue.