Monday, June 25, 2007

As of this morning, the Senate Dems have released the major points of their universal health care plan, called "Healthy Wisconsin," and here's what can be gleaned from them:

• Payer structure (see UPDATE below): Although it's not completely clear from what's been released so far, the payer structure under the Healthy Wisconsin initiative would mimic the structure under the Wisconsin Health Care Partnership Plan, in which a single plan would be created through a public-private trust that would negotiate directly with providers. Private insurance still would be available, but at a "nominal cost."
  

• Funding mechanism: There would be a 4 percent assessment on employee Social Security wages (i.e., wages up to $97,500) and a 10.5 percent assessment on payroll for employers. Aside from preventive care and care for children, all visits and prescriptions would involve co-pays and a deductible set at $300 for individuals and $600 for families.
  

• Bottom line: Based upon a Lewin Group study, the plan would save the state $1.3 billion, which would most likely come from reduced public worker benefit costs. The plan would use this money for property tax relief for households and businesses.

Republicans are jumping all over the funding, calling it the "largest tax increase in the history of the state," even though that soundbite ignores what employers and employees are already paying for health care -- which, on average, is a lot more than what they'd pay under the Healthy Wisconsin initiative -- and the property tax savings that would come under the plan.

The tax increase line is a predictable point of opposition to start with since it's an easier sell than what I think will ultimately be the biggest roadblock for this plan (aside, that is, from the Republican Assembly), which is the payer structure. Even though the plan isn't explicitly single payer, it looks quite close (unless I'm misreading the info that's been released on the plan, thus far -- look for an update later in the day if that's the case).

While single payer has great promise in terms of administrative efficiencies and putting payers back in a strong negotiating position with an increasingly consolidated provider side, it also has the political baggage that comes with shutting out an entire industry and the ideological heat that comes with involving the government directly in health care negotiations, even if those negotiations take place through a public-private trust.

It would help if the plan allowed for direct private competition in a similar way as John Edwards' national proposal, which lets consumers choose between a public plan and an array of private plans. Or the public plan could provide basic coverage while private plans are relied upon for supplemental coverage, which is essentially how the French do it. Any way you slice it, the Dems need to find some place for private plans, and it remains to be seen if allowing them at "a nominal cost" is enough.

The details will be telling, and -- since this is by no means a final offer -- so will the discussions that take place between now and when something actually gets passed, which -- as I noted last week -- won't happen before 2009, at the earliest.

UPDATE: The full text of the Healthy Wisconsin bill is out (the meaty details start on page 22).

Importantly, the text of the bill makes clear that this proposal is NOT single payer. The "health networks" it refers to are -- based on my reading -- private insurers who submit bids to the public-private trust. Based upon cost and coverage, the trust will determine the "low cost" networks and everything else will be categorized as a "higher cost" network. If people opt for one of the low cost networks, the trust will cover the entire cost of premiums. If people choose one of the higher cost networks, they will be reponsible for the premium cost difference between that network and the low cost network rate.

This is similar to how the tiering works under the Wisconsin Health Plan, which is the system currently used for state employees.

This is an important point because it avoids the political pitfalls of single payer and ensures that the direct negotiations between payers and providers will be a market endeavor rather than one that's overly-dictated by the state.