Ron Wyden is on to something interesting in health care that should get a lot more attention than it does.

His ambitious proposal, dubbed the Healthy Americans Act, would provide health care coverage for all Americans that is equal to what members of Congress get.

It would abolish the current system, where most people get insurance through their employer. Instead, employers would "cash out" their existing health plans by paying the amount saved directly to workers as increased wages. Workers then would be required to buy health insurance from a pool of private plans.

The proposal would make insurance mandatory for everyone, except for those covered through Medicare or the military.

After two years, companies would no longer have to pay the higher wages. Instead, the companies would pay into an insurance pool, based on annual revenues and number of workers.

The plan would not cost more than what the country already spends on health insurance, according to Wyden. One analysis by the Lewin Group, a Virginia-based health care consulting firm, estimates it would save nearly $1.4 trillion in total national health care spending over the next decade.

Severing the relationship between employment and health insurance (do you buy home or auto insurance through your employer?) is important for (1) maximizing portability (you no longer have to worry about health insurance when changing jobs); (2) establishing individual responsibility (does it make any sense that you have to re-enroll every year in plans chosen for you by the HR department instead of shopping around for the plan that's right for you?); and (3) creating a competitive market in which insurance companies vie for your business (ever notice how aggressively Allstate, Geico, Progressive and State Farm compete for your auto insurance business?).

President Bush's tax proposals attempt to level the playing field between employer-provided health insurance and individually purchased, but Wyden's plan is better in totally eliminating the link between health care and employer. There are some details to quibble with, such as employers being forced to pay into an insurance pool. It would be better to have people just buy their own policies. Employers are going to have to adjust wages upward to compete for talent and companies are likely to spend the same amount on total compensation, but that amount that goes towards the company health plan will just end up being paid out in higher wages. To help the poor buy insurance, there can be government assistance.

This is the best type of system: individually-driven and reliant on market forces. President Bush ought to seize this opportunity to reach across the aisle and work with Senator Wyden on this good idea. They should hash out the details in private negotiations at either the White House or the Crawford ranch and then present it to the Congress in a united front. There is no better use of time on the domestic agenda than this. Once passed, the President can use the upswing in popularity that is sure to follow by making permanent current tax rates.

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