Achieving Universal Coverage at No Extra Cost

While the health care plans of Hillary Clinton, John McCain, and Barack Obama have understandably gotten most of the attention, there is another proposal working its way through Congress that might be better than all three.

A preliminary evaluation of a proposal by Senators Ron Wyden (Dem. - WY) and Bob Bennett (Rep. - UT) by the Congressional Budget Office finds that the pair's universal coverage plan could potentially be revenue neutral for the government.

The same can't be said for even McCain's proposal, which, while encouraging a free market for insurance, would still include a federally-subsidized component for those higher risk patients who still couldn't find insurance. McCain's economic adviser, Douglas Holtz-Eakin, told NYT that this safety net could cost between $7-$10 billion per year.

Obama's universal health care plan, which is similar to the one which covers members of Congress, would cost between $50-$65 billion. Clinton's proposal, which uses a mandate system similar to Massachusetts, is estimated to cost about $110 billion.

Wyden and Bennett's plan also requires individuals to purchase insurance, but what sets it apart is that it ends the tax exclusion for employer-based health insurance premiums.

This from the CBO, which looked at a hypothetical 2014 when the plan would be fully operational:

Overall, our preliminary analysis indicates that the proposal would be roughly budget-neutral in 2014. That is, our analysis suggests that your proposal would be essentially self-financing in the first year that it was fully implemented. That net result reflects large gross changes in Federal revenues and outlays that would roughly offset each other.

More specifically, under your proposal, most health insurance premiums that are now paid privately would flow through the Federal budget. As a result, total Federal outlays for health insurance premiums in 2014 would be on the order of $1.3 trillion to $1.4 trillion. Those costs would be approximately offset by revenues and savings from several sources: premium payments collected from individuals through their tax returns; revenue raised by replacing the current tax exclusion for health insurance with an income tax deduction; new tax payments by employers to the Federal government; Federal savings on Medicaid and SCHIP; and state maintenance-of-effort payments of their savings from Medicaid and SCHIP.

To be fair, the other candidates say they can pay for their proposals at little or no extra cost by either repealing President Bush's tax cuts (Obama and Clinton) or by redirected funds from other programs (McCain). Still, Wyden and Bennett's is the most revolutionary, and since there's things in it that piss off all sides, it might also be the best of the bunch.