In a previous article on the Colorado Health Insurance Insider, we were excited about Gov.-elect Bill Ritter’s promise to provide health insurance to the 760,000 residents of Colorado that are uninsured, but skeptical of universal health insurance plans recently enacted in other states.

However, I’ve since reviewed a new plan by Senator Ron Wyden (D OR) that plans to cover all of the uninsured in the country, and the idea is genius!  Senator Wyden plans to completely get rid of employer based health insurance with what he calls “The Healthy Americans Act of 2007“.  Why is that such a good idea?  Employees wouldn’t be losing a current benefit from their employment package because The Healthy Americans Act would require all employers who previously offered health insurance to their employees in 2006 to convert what they spent on health insurance into a salary increase.  Immediately, this would be the single largest pay raise this country has ever seen.  And because health insurance costs typically rise about 10% per year, the employers wouldn’t be burdened with that increase in 2007.

Now that there aren’t any employer sponsored health insurance plans and everybody is an individual or family, everybody will be required to purchase an option from their state’s Health Help Agency (HHA).  The HHA will offer a variety of plans which are required to be as good as or better than the Blue Cross Blue Shield Standard Plan used by Congress.  All of the plans will be community rated by state, eliminating adverse selection and problems for people with pre-existing conditions.  The only rating variables health insurance companies can apply are geography, family size, and smoking status (although I’d like to see obesity added).  The government will subsidize those earning up to 400% of the poverty level and fully subsidize those at or below the poverty line.  There are more details, but that’s the gist of it.

The new plan is getting a lot of press, and it generating a lot of buzz in the health policy blogosphere.  Some of the best discussion come from Joe Paduda, here and here, The Health Care Blog, and Ezra Klein.  You can read an opposing view to the plan at InsureBlog.  And you can read about what kind of an impact the plan might have on workers comp at the Workers Comp Insider.