The ACA became law in 2010, but from 2007 to 2009, much betting in Washington focused on a different proposal, “Wyden-Bennett” (named for Wyden and Utah’s Republican Senator Robert Bennett). Far more radical than the ACA, Wyden-Bennett attracted support from Republicans, including Mississippi’s Trent Lott.

Wyden-Bennett would have shifted people from employer-sponsored policies into an individual market, where people would have shopped for health insurance as they do car and homeowner’s insurance. Wyden-Bennett would have eliminated Medicaid altogether, with subsidies enabling lower-income Americans to purchase the same health insurance policies as their wealthier neighbors. Then, patients of modest means wouldn’t face doctors saying, “Sorry. We don’t take Medicaid patients.”

I didn’t support Wyden-Bennett, but was impressed by its ambition and intellectual coherence.

[Health-care reform should have taken the path of removing third-party payers and restoring real pricing signals to end consumers, while expanding tax-sheltered FSAs and HSAs. That would have created a market for catastrophic health insurance, which is a much more rational way to deal with risk pools, and allowed providers to save an enormous amount of overhead dedicated to dealing with insurers. This would have been a second-best approach, though. — Ed]