Kennedy, Dodd Reveal Health Care Reform Bill

NU Online News Service, July 2, 1:03 p.m. EDT

WASHINGTON--Key Senate Democrats unveiled a "public plan" option for health care reform that would be administered by the Department of Health and Human Services, which would negotiate rates and premiums.

The legislation, which was announced today by Sens. Edward M. Kennedy, D-Mass., and Christopher Dodd, D-Conn., would set a $750-per-worker annual fee on larger companies that do not offer coverage to employees.

Sen. Kennedy and Sen. Dodd both serve on the Senate Health, Education Labor and Pension Committee.

Their bill would set a fee of $375 for part-time workers. Companies with fewer than 25 employees would be exempt.

According to data provided by the panel, the fee was projected to generate $52 billion over 10 years. As envisioned under the Senate HELP Committee plan, these funds would be used by the government to help provide subsidies to those who cannot afford insurance.

In a letter to Republicans on the committee, the two senators also said that the Congressional Budget Office reduced the cost of their health care reform proposal at $611.4 billion over 10 years, down from $1 trillion two weeks ago.

The letter said the lower cost projections resulted from two changes, implementing the government-run health insurance option, and the employer fees.

The revision also "virtually eliminates" an earlier forecast that the proposal would cause many companies to drop coverage for their workers, they said.

The two senators projected that the new plan would help cover 97 percent of the U.S. population.

The proposal is likely to be controversial because it mirrors unsuccessful initiatives by Democrats several years ago to pass legislation that would allow the government to compete with private plans offering prescription drugs under Part D of Medicare by negotiating rates with pharmaceutical manufacturers.

That legislation passed the House in 2007, but failed to make headway in the Senate.

The new proposal would also be offered through health insurance gateways, or "navigators" that are under heavy fire from insurance agents who sell health care coverage.

Health insurance agents also oppose the public option proposal.

The plan was unveiled as the HELP Committee and the Senate Finance Committee, as well as a consortium of committees in the House, prepare to move on legislation that would reform the current health care delivery system.

Work is expected to start Monday, as Congress returns from its July 4th recess.

The current plan is for the HELP and Senate Finance Committees to report different legislation out of their committees then mesh their bills and report them to the Senate floor for a vote before the congressional August recess.

The HELP Committee plans to finish work on its version of the legislation by the end of next week, congressional staff said, likely passing it along a party-line vote.

By contrast, the Senate Finance Committee is drafting a compromise measure designed to pass the committee with bipartisan support.

Senate Finance Committee negotiators are seeking to craft a compromise to the "public option" that would create nonprofit cooperatives to sell insurance as a competitor to private companies.