"Employer-based coverage is melting away like a Popsicle on the sidewalk in August," said Sen. Ron Wyden, a member of the Senate Finance subcommittee on health care.
Wyden's proposal, which he plans to unveil on Wednesday, 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.
At Wyden's request, the Lewin Group, a Virginia-based health care consulting firm, reviewed the plan. The consultant 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.
Increases in premium payments for individuals and families would be offset by higher wages and subsidies provided under the plan, the report said. As an example, Wyden cited a worker who earned $60,000 last year, and received about $12,000 worth of health care coverage.
The worker's health insurance would be terminated but his salary would increase to $72,000, which would cover his health care coverage. The plan would bar workers from buying a "bare-bones" health package and pocketing the savings, Wyden said.
"You can't take your $9,000 and go to Hawaii," he said.
Wyden said he's aware of the political pitfalls of health care reform but believes the time has come to address the issue again.
"I think the country wants health care fixed," he said, citing skyrocketing costs and an estimated 46 million people who are uninsured. "There's been lots of rhetoric and position papers. It's time for action."