By Alex Wayne, CQ Staff
May 23, 2007 – Sen. Ron Wyden, trying to build momentum for a broad health care overhaul, told an audience of small business owners Wednesday that they would be better off under his proposed health insurance plan than under today's patchwork system.
Wyden, an Oregon Democrat, has introduced legislation (S 334) that would end the nation's system of employer-linked private health insurance, and instead require individuals to buy insurance on their own. The plan would require employers to raise wages, instead of providing health benefits, or make payments to the government to help subsidize the cost of insurance.
"The employer wins and the worker wins on the first day" the legislation is enacted, Wyden told the business executives.
While Wyden has a Republican cosponsor for his plan, Robert F. Bennett of Utah, and a group of bipartisan House members also have said they support it, he has not yet gained traction with congressional leaders. Democratic leaders have said that their top health care priorities are to pass a large expansion of the State Children's Health Insurance Program, expand federal funding for embryonic stem cell research, and allow Medicare to negotiate prices in its prescription drug benefit.
President Bush has proposed allowing individuals to claim tax deductions for health insurance they buy on their own, a step toward breaking the link between insurance and employment. Wyden supports President Bush's idea, in concept.
Wyden's speech was hosted by the U.S. Chamber of Commerce, whose chief lobbyist, R. Bruce Josten, challenged Wyden to rebut skeptical business owners who may see his plan as a federal mandate or a recipe for a higher tax bill. The government does not require businesses to provide health care now. And if those that do were forced to raise wages to replace their health benefits, they would pay more taxes, because the cost of health insurance is deductible.
"I essentially take the gorilla off the employers' backs," Wyden responded. "The small business person would no longer be in the role of trying to deliver health care."
But he acknowledged that businesses would still have to contribute to health care costs, either by raising wages or with a "shared responsibility" payment to the government that would be based on revenue and numbers of employees.
"Instead of that gorilla on the back of the employer, I substitute a very small, friendly, furry kind of creature," he said.
Congress has not considered a thorough overhaul of the nation's inefficient health care system since 1994, when the complex plan proposed by President Bill Clinton fell flat and, many Democrats believe, contributed to his party's defeat in the 1994 elections. Wyden argues that now is a good time to address the issue again because the government is divided between Republicans and Democrats, forcing bipartisan compromises.
Some states, including Massachusetts and California, are working on plans to extend health insurance coverage to all of their citizens. But Wyden argues that is primarily a problem for the federal government, because problems with the health care system begin with the tax code.
"The states cannot fix problems they did not cause," he said.