Daily News Updates - Health Insurance News

Health Insurance Fear vs. Other Fears, Pt.10 –- Wyden's Proposal

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Wyden's proposal was also evaluated by the Lewin Group. They have suggested the potential for even more drastic savings then Hacker’s. This could be as much as $1.48 trillion over 10 years. These derive very differently from Hacker’s plan using explicit spending caps in the group market. The theory is based on consumer health insurance choices. Because individual consumers will now see exactly how much their health insurance/care will costs, they will shop around. The current employer scheme has the effect of masking the costs, because the individual is insulated (in knowledge at least) how high these costs are and their indirect costs. Most of these individuals will be more price-conscious and choose cheaper health insurance/care options. Most of these will be HMOs. So, instead of the government limiting medical costs like Hacker’s plan calls for, Wyden's plan puts the burden on individuals to do it. With this plan, Lewin estimates HMO enrollment will jump from the current 30% to 70%. This is expected to “bring large cost savings, as HMO enrollment did in the mid-1990s”. In case this doesn’t work, tho, there is a contingency plan. This one allows for cost controls in the future, if they are needed.

The way it is now, imposing targeted health insurance/care cost reforms can’t be done, because there's no system to implement them. All we have is a “health sector, composed of thousands of self-contained private health insurers routed through [a] myriad of [] employers, not a health system” as Mr. Klein explains. With this array of individual interests, there is little hope of widespread consensus.

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