As the election nears, discussions of the relative benefits and differences of Sens. Obama (D-IL) and McCain (R-AZ)’s healthcare reform proposals are rapidly proliferating.  But these discussions rarely consider the more progressive and potentially more effective Healthy Americans Act (HAA) proposed by Sens. Wyden (D-OR) & Bennett (R-UT), (S.334; http://wyden.senate.gov/issues/Legislation/Healthy_Americans_Act.cfm).

The HAA proposes a shift away from both government and employer-based coverage to an insurance exchange model with mandates for universal coverage.  Under the HAA, Americans would be offered a variety of private plans through regional purchasing organizations known as Health Help Agencies (HHAs).  These plans would meet certain requirements for basic coverage, including being at least as comprehensive as the Blue Cross/Blue Shield standard option plan currently offered through the Federal Employees Health Benefits Program.  Employer-provided coverage would be cashed out, as the cost of insurance would be paid to workers as wages, thereby allowing the worker to directly see the full cost of coverage.  Collective purchasing through an employer would still be permitted, although tax incentives would be in place to incentivize the selection of lower cost coverage plans by individual purchasers.  Participants would pay the full cost of whichever plan they select with subsidization provided on a sliding scale to those with incomes below 400% of the poverty line.

The HAA overlaps with key provisions of both the Obama and McCain plans e.g., it incorporates insurance exchanges (Obama) and treats employer-provided coverage as income (McCain), but is ultimately more ambitious.  Both the Congressional Budget Office and the Lewin Group have analyzed the HAA and concluded it would save billions of dollars in healthcare costs per year of operation with its first overhead years being budget neutral (http://wyden.senate.gov/issues/Healthy%20Americans%20Act/HAA_Cost_Coverage_Report.pdf) – outcompeting both the Obama and McCain proposals.

The HAA has the implicit support of Ezekiel Emanuel of the NIH, (http://campaignstops.blogs.nytimes.com/2008/10/17/new-research-that-should-inspire-the-candidates/) a longtime collaborator of the Stanford-based “dean of health-care economists” Victor Fuchs, as well as the support of at least 14 other Senators from both sides of the aisle.  The Act is strongly influenced by they work of Profs. Alan Garber, Sara Singer, and Alain Enthoven of Stanford’s Center for Health Policy (http://healthpolicy.stanford.edu/).  You can learn more about market-based universal coverage plans at Alain Enthoven’s talk at Stanford Law School on November 6th.

Co-written by Raag Airan, MD/PhD student, and Vinita Kailasanath, Law student at Stanford University.