David Sirota is all for Wyden's new healthcare plan. I have the greatest respect for David and the work he does, but honestly, when I read this, my first thought is "giveaway to the insurance companies".

The Associated Press gives us some details on Wyden's proposal:

"[The plan] is an outgrowth of work by the Citizens' Health Care Working Group, a 14-member panel that went to 50 communities around the country and heard from 28,000 people about how to overhaul the nation's health care system. The group, created in 2003 by legislation sponsored by Wyden and Sen. Orrin Hatch, R-Utah, recommended that the government take steps to guarantee that all Americans have basic health insurance coverage by 2012. Wyden said his new plan would allow workers to carry their health insurance from job to job without penalty. More efficient administration and more promotion of competition for health care plans, he said, would allow greater coverage while costing no more than the government is paying today for health insurance coverage. Called the Healthy Americans Act, the plan would cover all Americans except those on Medicare or those who receive health care through the military. It would require that employers "cash out" their existing health plans by terminating coverage and paying the amount saved directly to workers as increased wages. Workers then would be required to buy health insurance from a large pool of private plans. After two years, companies would no longer have to pay the higher wages. Instead, Wyden said, they would pay into an insurance pool, based on annual revenues and the number of full-time workers."

The story goes on to note that the Lewin Group, a Virginia-based health care consulting firm, "said the plan would reduce health spending by private employers by nearly three-quarters and would save $1.4 trillion in total national health care spending over the next decade." You can find the detailed proposal and the Lewin Group study at www.StandTallForAmerica.com.

This looks like an awful plan, actually.

More after the jump.

Let me emphasize, as someone who has worked in the US insurance industry (life, but life and health are more similar than you might think) and spent quite a bit of time studying the economics of health care - single payor is the way to go, otherwise insurance companies spend all their time avoiding sick people and trying to deny care. And oddly, by so doing, they increase their administratice costs by a factor of ten compared to plans which have uniform population coverage (ie. if an entire age cohort is insured, then there are no anti-selection issues, since you're getting everyone. And you know pretty close to exactly what your morbidity experience will be.)

This is key - the main reason single payor works becuase it eliminates competition. This is a case where less competition is good.

The Wyden plan would expand healthcare to everyone (supposedly, the description above does not indicate how it will do so, with all its talk of "workers" getting money and then buying from private companies) but it would do so in the most inefficient way possible and cost the US economy even more money that it can't afford, by keeping private insurers in the loop and keeping the hot potato game going. (ie. I simply don't believe the study.)

Expand Medicare to the entire population, tax companies for about the same as they now have to pay for private insuramce, and get it over with. It is not necessary to over complicate this - as long as you've willing to attack the insurance companies head on. If you're not, you won't solve the problem in the end. There is no win-win for both health insurance companies and ordinary Americans on this issue.