Support choice and competition in healthcare reform through Sen. Wyden's Free Choice Amendment

Last week, the business-led Committee for Economic Development (CED) released an open letter to members of the Business Roundtable and Members of Congress calling for comprehensive health-care reform – far beyond the piecemeal changes considered thus far in the healthcare debate.

Short of starting over with a fundamentally different bill, CED believes that the most constructive change to the current legislation would be the “Free Choice” amendment of Senator Ron Wyden (D-OR).

The CED letter urges Congress to address the underlying problems in the healthcare system: the absence of choice and competition.  Today, 77 percent of private-sector employees with coverage have no choice of insurance carrier. The Finance Committee bill protects this monopoly, leaving 200 million Americans with no choice of health plan.  This system, without competition and without portable coverage for employees, would have the same fundamental problems that we have today.  The legislation in Congress therefore merely expands the status quo and makes its exploding costs even worse.

In 2007, CED proposed reforming the healthcare system by giving all Americans access to health-insurance exchanges. The exchanges would offer each individual a single access point to choose plans based on cost and quality.  This would maximize choice and competition, increase the incentive for insurers and providers to build effective delivery systems, and thus decrease the cost of health care and health insurance coverage.

Several major business lobby groups have sent letters to Members of Congress opposing Senator Wyden’s amendment.  In so doing, they have supported an expansion of the current unaffordable system.  Some business leaders have recognized the need for change.  Contrary to the position of the largest business lobby groups, a majority of business leaders (62 percent) believe that the employer-based system is unsustainable.  (See CED link)

Senator Wyden’s “Free Choice” amendment protects employer insurance plans but opens the door to choice by giving employees the option to join the proposed health exchanges. The big business lobbies fear that choice would erode the employer-based system.  However, every American taxpayer currently subsidizes, and would continue to subsidize, employer-paid health insurance through the income tax exclusion.  CED advocates a cost-conscious choice among competing plans.  Under the current Finance Committee bill, only 25 million Americans would have access to state-based exchanges.  Such small pools would be unattractive to insurance competition and would invite adverse selection.  Costs in both public and private budgets would continue to grow.

CED strongly urges the Business Roundtable, the Chamber of Commerce, and other business lobbies to change their position and support competition and choice in health care through the Wyden amendment.