THE BLOG
11/21/2009 05:12 am ET Updated May 25, 2011

Senator Ron Wyden: The Public Option Doesn't Go Far Enough

Senator Ron Wyden (D-OR) has served in the Senate since 1996 and is a member of the Senate Finance Committee. The Finance Committee, headed by Senator Max Baucus, is receiving widespread media attention because of the release of its much-anticipated health care bill. In response to that proposal, Wyden has filed an amendment known as "The Free Choice Proposal."

Senator Wyden discussed his amendment in detail with me, just two days after he met with President Obama to discuss the latest developments in the health care reform battle.

Kathleen Wells: Will you support Senator Baucus' health reform bill?

Senator Wyden: I was with the President on Wednesday, with Senator Bob Bennett of Utah and I said, "Mr. President, I'm going to do everything I can to fix this bill." The President set out the right timetable to ensure that health care reform was passed this year. The Finance Committee is the next step in the process.

As written, I think this bill has a number of provisions that run contrary to the President's hopes and aspirations for health reform. For example, last Wednesday when the President spoke to the country, the President said that his guiding principles for health reform were choice and competition. Unfortunately, due to the power of the insurance lobby, which in my view heads up what I call "the status quo caucus," more than 200 million Americans would actually be barred legally from having the kind of choice and competition that the President spoke about.

So, I'm going to be focusing on amendments designed to ensure that all Americans would have good quality, affordable choices as members of Congress do and I'm going to be focusing on amendments to make coverage more affordable for middle class people.

Kathleen Wells: When you talk of offering amendments, are you referring to the Free Choice Proposal?

Senator Wyden: Yes. The Free Choice Proposal will be filed as an amendment later today [last Friday] because this is central to ensuring that all Americans have good quality, affordable coverage and to hold insurance companies accountable. Right now, insurance companies call all the shots and because people don't have any choices, they can't hold the companies accountable. So, what I'm trying to do is turn the tables on the insurance lobby and put the consumer in the driver seat.

Here's an example: Today, if you are a member of Congress or, for example, a janitor at the Federal Bureau of Engraving in Washington D.C. and your insurance company rips you off in September of 2009, come January of 2010, you can choose from more than a dozen other alternatives [for heath care]. So, that means there is choice and competition. It means, for example, that if an insurance company doesn't act responsibly in the fall of 2009, you could take your business elsewhere. You could be in charge and that makes them, obviously, more interested in being responsive to your needs.

Kathleen Wells: I read a summary of your Plan and it's an exchange. What about the public option?

Senator Wyden: I'm open to the pubic option and I've said that to your publication and others. What's important for folks to know, and what I was struck with this summer [is]: I had town meeting across my state. I had eight town meetings across Oregon. I headed into a gym in a community and up against the wall there would be lots of folks with public option signs [stating] "Public option or bust." I'd say, "Folks, I really appreciate the fact that you are trying to hold the insurance companies accountable and trying to put the consumer in the driver's seat. Are you aware that the way these bills are written now, more than 85 percent of you would be legally prohibited from choosing a public option?" People practically fell out of the bleachers.

I happen to think that choice, whether it's private sector choice or public sector choice, is the key to competition. Competition is the key to holding the insurance companies accountable, turning the tables on the insurance lobby. It's almost as if the country has been having this debate between the ideas of private option versus public option when what we really ought to be thinking about is "no choice" option.

[That] is what I think is going to happen unless we can empower consumers and make sure they have plenty of opportunities to hold the insurance lobby accountable. The insurance industry does not want something like this because they are slicing a fat hog. They've got people captive. Folks, most of them, sign up with their employer. They take what their employer gives them. They don't get choices and there is no incentive to improve products and no opportunity for the consumer to turn the tables on the industry.

Kathleen Wells: What about allowing insurance companies to compete across state lines?

Senator Wyden: There are some consumer protection issues with respect to this issue of competing across state lines. There may be a way to do it. Right now, unless you are sensitive to adverse selection kinds of questions, I think the Congress ought to be careful about going there.

Kathleen Wells: I've been told that Alabama has one insurance company that covers 90-percent of everyone insured in the state. With the choices you're proposing, what would happen in states like Alabama?

Senator Wyden: I personally believe that when you increase the pool of customers (and that's the point of the personal responsibility requirement), the idea [being] that you have to purchase coverage; then you create a competitive market place because in a lot of places, there aren't any. In other words, you may have employers and insurers and they all play golf together; they've all been pals. And everybody [thinks] let's keep doing it the way we are doing it because it's convenient for us and it's profitable for the insurer and the employer says nobody is pressing us for an alternative.

I'm talking about turning the private insurance business on its head and empowering consumers. Instead of letting insurers just call all the shots and, often in states where there isn't much competition, with their friends and people that they have known for a long time, people that they play golf with, you have nobody even in a position to shake up the system. That's what we do with Free Choice and why the insurance lobby is so against it.

Kathleen Wells: Isn't a public option the best way to ensure competition?

Senator Wyden: I have said I'm open to it. What I hope your readers know is that the [Baucus] bill, as written, doesn't let 85-percent of the people get it. So, let's do what is going to help consumers most first, which is to provide choice. Over the last couple of months, enormous amounts of money and grassroots activity have been devoted to this subject and nobody has ever told activists that more than 85-percent of them wouldn't even be allowed to get access to the public option. Whatever you do, whether it's private or public, start by giving people choices.

Right now, the exchanges are basically going to be available to a small number of people. So, most of the time when I'm on the phone-I was on the phone with some of my progressive media folks the other day and they were talking all about public option, and I asked them where they were-and I said, "Guys, you won't be allowed to choose a public option." There was just, a long pause on the other end of the phone and somebody said maybe we shouldn't be for it anymore.

Someone needs to be straight with folks who have been allies. They are working for the right thing. They know, as I do, that the insurance model in this country must be turned on its head. It's about cherry picking; it's about taking healthy people and sending sick people over to government programs more fragile than they are. It is, in many respects, inhumane and indefensible.

There is only one tough law on the books today to stop insurance company rip-offs and I wrote it. It's the law that stops the private insurers from ripping off older people in the policies sold to supplement Medicare and I wrote that law in the early 90s. I basically took that model and used it for purposes of my legislation on the health reform debate.

Kathleen Wells: Essentially you're proposing universal coverage, but many critics claim that creates too much change within the system and people just aren't ready for it.

Senator Wyden: This is something that duplicates a successful program. This is modeled after something that serves members of Congress and hundreds of thousands of Federal employees every week. This is not something someone just dreamed up.

In fact, if you look at the President's rallies (I mentioned that I met with the President on Wednesday), the President, at virtually every rally, looks out at the crowd and says, "You should get the same deal that members of Congress get" and the crowd goes wild, huge applause line. But these bills that are being written, not only don't give people the deal what the President is talking about - the deal like members of Congress- they don't give 200 million people any choices at all. That's what I'm going to fix.

Kathleen Wells: I know that the President would like a bipartisan bill. But I think it's safe to say that the Republicans are not going to go for your plan.

Senator Wyden: Take Bob Bennett of Utah, a lead Republican sponsor, a conservative Republican in the reddest state in the United States who has a primary [opponent] from the right, running primarily on his involvement with me in a piece of legislation with provisions that Democrats have dreamed about for 70 years, he said he is not backing off from his support.

Quite the contrary, he is basically telling the President that he is going to put his career on the line, fighting for something we believe brings people together. It melds together Democratic principles that we fought 70 years for - covering everybody [with] universal coverage, generous subsidies. Principles Democrats have fought [to get] for years. Senator Bennett says what he has to have are the choices and competition in the real world for the private sector. So, what we've done is sort of created an opportunity for some philosophical common ground and it's built from the center out. In other words, you start there and then you start moving to talk to Progressives. Senator Bennett obviously talked to some conservatives. We've got nine Senators on it, many progressive folks: Debbie Stabanow, Maria Cantwell, Jeff Merkley - folks that are ranked very high on any scorecard of progressive issues and then we've got some very conservative Republicans, as well.

Kathleen Wells: Why is the Baucus bill so antithetical to your proposal?

Senator Wyden: I'll let him speak for himself. I will just tell you what I'm going to be doing. Starting Tuesday [I'll be] trying to export as many of the pro-competition, pro-choice, holding insurance companies accountable principles of our legislation as I can into that legislation. Unless you do, I don't think you are going to be able to fix this bill.

Kathleen Wells: What's the timetable now?

Senator Wyden: Starts on Tuesday and I'm going to be offering amendments to promote free choice and seamless portability of coverage. That's another very significant factor. A lot of these proposals are popping up [like] COBRA, which is this program for the uninsured. I call it the only federal program named after a poisonous snake and what I want [is] if you leave your job or your job leaves you, I want you to have seamless portability and I'm going to be offering an amendment to do that, too. So, it's all going to be about choice, competition and portability. These are magical words for progressive folks and, frankly, for the whole country and that's what our message ought to be.