A member of the Senate Finance Committee wants to replace the group health insurance system with a new, mandatory individual health insurance system that would be coordinated by state-based “health help agencies.”

Sen. Ronald Wyden, D-Ore., says the bill, the Healthy Americans Act, eventually would require all employers to pay an amount equal to 25% of essential care in their areas.

Employers and insurance agents could still help consumers sign up for coverage, according to Wyden.

But, in most cases, consumers who had incomes over the federal poverty level would be responsible for paying at least part of the cost of individual coverage from private health insurers, Wyden says.

Insurers would not be allowed to consider existing health problems, occupation, gender, genetic information or age when deciding whether to accept consumers’ applications for coverage or setting coverage prices.

Insurers could offer discounts or other incentives for enrollees who participate in approved wellness programs.

Starting 2 years after the individual health insurance mandate law passed, individuals would be prohibited from using bankruptcy to clear penalties related to failures to pay for health insurance.

Adults who oppose use of conventional medical coverage for religious reasons would be exempted from the coverage purchase requirements.

Wyden predicts the program would save about $1.5 trillion over 10 years.

Andrew Stern, president of the Service Employees International Union, Washington, is praising Wyden for coming up with a new approach to dealing with the cost of health coverage.

“Our employer based health care system is a relic of a national and industrial economy,” Stern says in a statement. “Today, America cannot compete in a global economy when we put the price of health care on the cost of our products, and our competitor nations do not…. It is time for fundamental, not incremental change.”

Joseph Hansen, president of the United Food and Commercial Workers Union, Washington, also is praising Wyden for trying to reform the health finance system, but he is criticizing the proposal.

“Working middle class families could have a greater financial burden under the proposed reform than they do under the current system,” Hansen says. “UFCW members cannot support any proposal that could potentially raise costs for workers.”

The Wyden bill includes a complicated tax deduction subsidy system, but it is not clear how current members of employment-based plans would do under the system, Hansen says.

A copy of the Wyden bill, which does not yet have a bill number, is on the Web at Document Link