SEATTLE -- If the U.S. wants real health care reform, it needs to make sure everyone is covered. The way to pay for that coverage? Limiting the tax-exempt status of health insurance premiums, Sen. Ron Wyden (D-Ore.) said yesterday at the annual meeting of the Association of Health Care Journalists.

Wyden's Healthy Americans Act -- co-sponsored with Republican Robert Bennett of Utah -- would require all Americans except those covered by Medicare or in the military to buy a health insurance policy. (The Wall Street Journal's Gerald Seib has an excellent summary of the bill here; you can see Wyden discuss the plan here and read the full text here.)

Here are the basics: The government would pay the costs for those at or below the poverty line, and that subsidy would decrease as a family's income increased. Employers would still be welcome to provide coverage, but if they didn't, each employee would get a check for the amount that coverage his or her coverage would cost. But as the WSJ's Seib points out, employers "would pay a fee -- a tax, really -- for each employee to help fund those federal subsidies to help families buy their policies."

How those numbers work out, and just what percentage of this insurance "rebate" check would be taxable for the employees who got them, remains to be seen, particularly as Congressional committee members mark up the bill and make changes. But Wyden is convinced that whatever health care reform costs, it will pay for itself. And the Congressional Budget Office (CBO) agrees with him -- to a point. They'll "score" some of the cost savings he's claiming for his bill, but not others, particularly those directed at prevention -- eg lowering cholesterol and blood pressure. Overall, however, the CBO says the proposal will in fact pay for itself.

For his part, Wyden is optimistic that the time is right for real health care reform. The history of health care in the U.S. is "a story of unrequited love for health care reformers," Wyden said. But despite the fact that the last major reform effort -- the Clinton plan in 1993 -- was a complete failure, he said there are reasons for hope.

Chief among them? The fact that health care is consuming such a large percentage of the GDP creates pressure to bring down costs, especially during the economic meltdown. "Fixing health care and fixing the economy are not only not mutually exclusive, they go hand in hand," he said.

The U.S. spends enough on health care -- $2.5 trillion per year -- he says, but it spends it in the wrong places. The CBO says current health care spending could pay for one doctor for every seven U.S. families, Wyden notes. But many remain uninsured, while others get care they may not need or is too expensive. "We can't fix the economy without fixing health care," Wyden said. "The middle class can't get ahead because their wages are gobbled up by health care."

Wyden also says the time is right because "there has never been the opportunity for bipartisanship that there is today." He notes that the Wyden-Bennett measure is the first time in history so many Senators from both sides of aisle have signed onto a bill.

Health care reform is not Wyden's first foray into medical issues. In 2005, Wyden threatened a Senate filibuster over the Terri Schiavo case, because he was concerned about the integrity of Oregon's death with dignity law.

Bonus: Fun facts about Wyden: His wife owns The Strand bookstore in New York. The couple introduced former CBO director Peter Orzsag (now White House budget director) to his current girlfriend (thanks, @jcohntnr).

photo of Sen. Wyden copyright Scientific American