The planned amendment, announced Friday, November 20, by Senate Majority Leader Harry Reid, D-Nevada, Senate Finance Committee Chairman Max Baucus, D-Montana, and Sen. Ron Wyden, D-Oregon, is likely to upset employers, says Frank McArdle, a principal of consulting firm Hewitt Associates who is based in Washington.
“We have to reserve judgment until we see all the details, but on the face of it employers won’t like it,” he says.
Democratic senators on Friday offered few details other than a one-paragraph statement explaining that employees whose incomes are below 400 percent of the federal poverty level and whose premiums are between 8 and 9.8 percent of their total income would be allowed to buy insurance on a proposed health exchange with their employer’s money.
These employees would be eligible to receive a voucher from their employees equal to the amount that employer would have spent on their health insurance. The employee could use that voucher to buy insurance on the exchange.
The amendment had originally been proposed by Wyden during the Senate Finance Committee’s deliberations of its health reform proposal. The amendment was then opposed by both labor unions and employers who feared it could lead healthy employees to take the subsidy and buy cheaper plans on the exchange.
After negotiations, Wyden withdrew the amendment but was told he could offer it on the Senate floor with the blessing of Senate Democratic leaders, McArdle says.
While many employees would not be eligible for the voucher, it could be hard to administer.
“Once you have to start issuing vouchers for a group of people, it can throw off the whole balance of your health plan,” McArdle says.
The Congressional Budget Office estimated that Wyden’s previous version of the amendment would expand coverage to more than 1 million individuals, Democratic leaders said in a press release announcing the amendment.
The Senate reform bill introduced Wednesday, November 18, is estimated to cost $894 billion over 10 years. It would extend health insurance to an estimated 31 million uninsured Americans and legal residents by expanding eligibility for federal programs and providing subsidies to lower-income workers and tax credits to small businesses.
The entire bill faces a key procedural vote Saturday, November 21, to allow it to advance for debate on the Senate floor.