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Another Choice for Wyden (and Bayh)?

If negotiations over health care reform get to conference between the House and Senate--no jinxing here--controversial issues like abortion and funding are going to get the most attention. And, precisely because the issues evoke such strong feelings, coming to agreement on them will be relatively difficult. But there are myriad issues more amenable to compromise because they are lower profile. And, in some cases, they have the potential to improve the bill significantly.

Among them is what’s come to be known as the “choice initiative,” whose chief advocate is Oregon Senator Ron Wyden. The choice initiative is the descendant of Wyden’s full-scale health reform plan, the one he first introduced back in late 2006 and spent the better part of three years promoting. Under his plan, every single person would have basically gotten a voucher and started shopping for coverage inside a regulated marketplace, where insurers couldn’t discriminate against the sick and the benefits were comprehensive. The hope was not only to provide full universal coverage, which the Wyden proposal would have done, but to inject a high dose of competition into the system, since literally everybody would have been shopping around for the best insurance they could find.

Despite attracting some bipartisan support, the Wyden plan never hit a critical mass. Even people with good employer insurance would have had to switch plans, making it politically toxic. As a result, Wyden in recent months has been trying to promote some of the component ideas and graft them onto the bills moving through Congress. He finally won a crucial, if modest, victory when Majority Leader Reid added a provision to his bill, under which a narrow group of people--basically, those too rich to qualify for subsidies but poor enough to be exempt from the requirement to buy their employer’s insurance--could use their employer contribution to pay for coverage inside the new insurance exchanges, which operate like the marketplaces Wyden envisioned but are open only to people without employer coverage.

But Wyden would like to add one more twist. Under  the Senate bill, small businesses can also buy coverage through the exchanges--since, like individuals, they don’t get the same advantages (on price and availability) that large companies already do. But when they do that, they simply pick a plan and offer it to their employees.  The employees themselves, in other words, are still stuck with whatever their employers pick--just like today.

Wyden has proposed letting small business employers give the employees a voucher, and then let those employees choose. It’s a good idea--and a legitimately big deal. It would mean several million more people a year shopping around for coverage. That’s more choices for them--and more competition for the system.

Better still, it sounds like the idea has some momentum, because of two key backers. The National Federation of Independent Businesses has endorsed the idea--strongly--suggesting it’d be good for their members, by easing their benefits burden. NFIB is a traditional opponent of reform and has, in fact, come out against the Senate bill overall. It’s not clear whether inserting this amendment would change that. But it’s always possible it might soften their opposition--maybe even nudge them to a more neutral stance. And that could help politically, down the road, as Republicans try to paint health reform as anti-business and anti-jobs.

The other key backer is Indiana Senator Evan Bayh, who got the administration’s attention with a stirring speech during last week’s meeting between the president and members of the Senate Democratic Caucus. Bayh has credibility as a pro-business moderate--so, again, his endorsement gives the ideas some legs. (Republican Susan Collins has also supported the amendment, although she’s said she won’t be voting for the bill.)

Whether that’s enough is unclear. Labor and business have opposed both the Wyden bill and its spin offs. And while the unions might be perfectly ok with this, other elements of the business lobby--that is, other than NFIB--apparently remain skeptical. But Wyden is nothing if not persistent, sometimes to the annoyance of his colleagues. With the help of Bayh and NFIB, he may get one last victory before this is done.

Follow Jonathan Cohn on Twitter: @jcohntnr