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Baucus Unveils $856 Billion Health Reform Plan

BY Lea Winerman  September 16, 2009 at 1:00 PM EDT

Sen. Max Baucus; Getty Images

The bill was the product of months of bipartisan negotiations between three Republican and three Democratic senators on the committee — the so-called “gang of six.” However, Baucus unveiled it Wednesday with no visible Republican support.

The plan would require nearly all Americans to purchase health insurance or pay a fine. It would offer subsidies on a sliding scale to help lower-income Americans afford it, offering subsidies to families between 133 percent and 300 percent of the federal poverty level (about $60,000 for a family of four). It would also expand Medicaid, the state-federal insurance program for the poor.

The Congressional Budget Office later released its own analysis of the bill, and estimated it would cost only $774 billion. This discrepancy might give Baucus some room to negotiate with other senators who want to expand the subsidies the bill provides or reduce fees and penalties.

The plan envisions that middle-income Americans would pay about 13 percent of their income in health insurance premiums, co-pays and other expenses.

Read the bill [PDF].

“The cost of America’s broken healthcare system has stretched families, businesses and the economy too far for too long. For too many, quality, affordable healthcare is simply out of reach,” Baucus told reporters in an introduction to the bill. “This is a unique moment in history where we can finally reach an objective so many of us have sought for so long.”

Listen to the full press conference:

The proposal mirrors many of the principles that President Obama put forward in a speech to Congress last week. It would introduce new insurance industry regulations designed to protect customers, barring insurers from denying coverage based on pre-existing conditions and from setting lifetime caps on benefits payments.

It would also set up a system of state-based, online health insurance exchanges where individuals and small businesses could shop for insurance plans. However, the exchanges would not include a government-run public plan option, something many Democrats, including President Obama, had endorsed. Instead, they would include nonprofit, member-owned health insurance cooperatives.

The bill doesn’t require employers to offer health insurance, but it would levy a fee on companies with 50 or more employers that choose not to do so. It would also require health insurance providers to collectively begin paying a fee of $6 billion per year in 2010 to help pay for the reforms.

Baucus told reporters that the plan “would not add a dime to the deficit.” According to the bill, it would be paid for with would be paid for with $349 billion in new taxes and fees and $507 billion in cuts to government health programs.

The plan still faces a tough road ahead. Baucus has said that the full committee will begin to debate it next week. So far, none of the three Republican negotiators on the committee — Sen. Olympia Snowe of Maine, Sen. Mike Enzi of Wyoming and Sen. Charles Grassley of Iowa — have endorsed it.

And some more liberal Democrats one the committee are displeased about the concessions made to Republicans. Sen. John Rockefeller of West Virginia, a vocal proponent of the public option, has said he cannot support the proposal without significant changes.

Baucus has said previously that negotiations could continue even after the bill was unveiled.

“This is a big task, let’s not forget,” says Elizabeth Carpenter, Associate Policy Director of the Health Policy Program at the New America Foundation. “They were making a good faith effort to negotiate as a group, and that takes some time.”