NU Online News Service, Sept. 16, 12:07 p.m.EDT

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WASHINGTON–An $700 billion-plus compromise bill callingfor cooperatives to provide health care instead of thecontroversial government "public plan" was unveiled today by Sen.Max Baucus, D-Mont., the Senate Finance Committee chairman.

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The legislation, expected to provide the best opportunity tosecure a health care delivery system overhaul this year, will formthe basis for legislative drafting within the Senate panel thatwill begin Monday.

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The compromise legislation omits the so-called "public plan" ofsuch concern to the insurance industry, as well as the equallycontroversial proposal for a so-called "Navigators" system thatwould bar insurance agents from providing advice and solicitingindividuals and groups for coverage.

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Joel Kopperud, a director of government relations for theCouncil of Insurance Agents and Brokers, said that as his groupprepared to advocate for issues acceptable to agents, "we'reencouraged that the government option is not included."

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But, he added, "We are concerned that Americans accessing theirinsurance through any exchange have access to the same insuranceprofessionals as those accessing coverage outside theexchange."

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John Greene, vice president of congressional affairs for theNational Association of Health Underwriters, said the committeehopes to complete its work by tomorrow.

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Moreover, he and others hope that release of the compromisedocument will set the stage for the drafting of a proposal in theHouse more acceptable to his group.

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Under the Baucus proposal, people will be allowed to getinsurance through a co-op even though their employer offersinsurance if the cost of the coverage exceeds 13 percent of theirincome.

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"We feel that if someone is offered private insurance, theyshould not be given access to a co-op or even an exchange that willalso offer lower-cost coverage," Mr. Greene said.

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If too many people aren't included in a group, it will raise thecost of coverage to all others to an unacceptable level and raisethe cost of insurance to the government.

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He said the agents' industry will also be seeking to ensurethere is an appropriate transition to the individual mandate thatwill require everyone to get insurance and will provide marketingopportunities for agents.

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"There needs to be an enforcement mechanism to ensure compliancewith the individual mandate," Mr. Greene said.

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Sen. Baucus said the his draft bill would cost $856 billion over10 years. But, later the Congressional Budget Office produced alower estimate of $774 billion.

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He contended that the "investment would be fully paid for,"mostly through increased focus on quality, efficiency, preventionand adjustments in federal health program payments, without addingto the federal deficit.

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Key issues that will be facing Sen. Baucus' effort to pass themeasure include the fact that no Republican has so far signed on,although Sen. Olympia Snowe, R-Maine, has been courted by Democratsand the White House.

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Other members of the so-called "gang of six" within the FinanceCommittee that have been working on a compromise bill but haven'tyet signed on include Sen. Charles Grassley, R-Iowa, and Sen. MikeEnzi, R-Wyoming.

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Sen. Grassley, a critical vote, said before the release of thebase document he will continue to work toward a compromiseagreement, but didn't totally commit himself.

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Among his concerns was that the document he would support in theSenate would be undone through negotiations with the more-liberalHouse.

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He also sought a commitment on several other issues, includinglanguage barring payment by the federal government for abortion andlanguage that would ensure that illegal aliens not get subsidizedfor health care through a final bill.

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But, he said, "we've been clear from the start that we'rewilling to stay at the table. There's no reason not to keep workinguntil we get it right. In the end, legislation that impacts everyAmerican should have strong bipartisan support."

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Under the legislation he is proposing, insurance companies wouldbe required to issue coverage to all individuals regardless ofhealth status.

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Moreover, insurers would no longer be allowed to limit coveragebased on preexisting conditions. But, limited variation in premiumrates would be permitted for tobacco use, age and familycomposition.

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Rating rules for the individual market would also apply to thesmall group market, as defined by states. This would include groupsof one to 50 employees, but could include companies with up to 100employees, depending on current state law.

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The Baucus legislation would seek to make purchasing healthinsurance coverage easier and more understandable by using theInternet to present consumers with available plans.

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His bill would create state-based Web portals, or "exchanges"that would direct consumers purchasing plans on the individualmarket to every health coverage option available in their ZIPcode.

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His bill would also give small businesses access to state-basedSmall Business Health Options Program, or SHOP exchanges.

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These exchanges–like the individual market exchanges–would beWeb portals that make comparing and purchasing health care coverageeasier for small businesses, Sen. Baucus said.

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In dealing with the transition to a reformed insurance market,Sen. Baucus proposed that once the insurance market reforms takeeffect, people who want to keep the insurance they have today cando so.

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Plans would be allowed to continue to offer the coverage theyoffer today, and this coverage would be grandfathered, he said."These grandfathered plans would only be available to those peoplewho are enrolled today or, in the case of a small employer, to newemployees and their dependents," Sen. Baucus explained.

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People who qualify for the health care affordability tax creditsin the reformed market would not be able to use the credits topurchase grandfathered plans, he said in addressing another issueof concern to agents.

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Tax credits would be offered only to purchase plans created inthe reformed market that meet the new benefit standards, hesaid.

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