New Dem health plan has public option, lower cost

Democrats on a key Senate Committee outlined a revised and far less costly health care plan Wednesday night that includes a government-run insurance option and an annual fee on employers who do not offer coverage to their workers.

The plan carries a 10-year price tag of slightly over $600 billion, and would lead toward an estimated 97 percent of all Americans having coverage, according to the Congressional Budget Office, Sens. Edward M. Kennedy and Chris Dodd said in a letter to other members of the Senate Health, Education, Labor and Pensions Committee. The AP obtained a copy.

By contrast, an earlier, incomplete proposal carried a price tag of roughly $1 trillion and would have left millions uninsured, CBO analysts said in mid-June.

The letter indicated the cost and coverage improvements resulted from two changes. The first calls for a government-run health insurance option to compete with private coverage plans, an option that has drawn intense opposition from Republicans.

"We must not settle for legislation that merely gestures at reform," the two Democrats wrote. "We must deliver on the promise of true change."

Additionally, the revised proposal calls for a $750 annual fee on employers for each full-time worker not offered coverage through their job. The fee would be set at $375 for part-time workers. Companies with fewer than 25 employees would be exempt. The fee was forecast to generate $52 billion over 10 years, money the government would use to help provide subsidies to those who cannot afford insurance.

The same provision is also estimated to greatly reduce the number of workers whose employers would drop coverage, thus addressing a major concern noted by CBO when it reviewed the earlier proposals.

Kennedy, D-Mass., and Dodd, D-Conn., circulated their letter a few days before lawmakers return from their July 4 vacation, with the Health Committee one of several panels expected to take action on health care legislation that President Barack Obama has placed atop his domestic agenda.

Kennedy, the committee chairman, was diagnosed with a brain tumor more than a year ago and has been absent from the Senate for weeks, although he and his aides have been heavily involved in the deliberations on a health care bill. Dodd, the next senior Democrat on the committee, has presided at committee sessions and taken an increasingly public role.

With its government option, the proposal is unlikely to gain any bipartisan support in the committee.

Separately, Democrats and Republicans on the Senate Finance Committee are at work trying to reach agreement on an alternative that calls for creation of nonprofit cooperatives to sell insurance in competition with private industry. Agreement has been elusive on that and other issues, and it is not clear whether a deal is possible before Democrats opt for a more partisan approach.

In their letter, Kennedy and Dodd said the Congressional Budget Office "has carefully reviewed our complete bill, and we are pleased to report that CBO has scored it at $611.4 billion over 10 years, with the new coverage provisions scored at $597 billion. ...The completed bill virtually eliminates the dropping of currently covered employees from employer-sponsored health plans.

"In addition, our bill, combined with the work being done by our colleagues in the Finance Committee, will dramatically reduce the number of uninsured — fully 97 percent of Americans will have coverage, a major achievement."

Three committees in the House have been at work for weeks on a plan expected to come to a vote by the end of July.

Source: The Associated Press