Senate Finance Committee Chairman Max Baucus’ bid to get a bipartisan agreement on a health care overhaul before President Obama addresses a joint session of Congress Wednesday night calls for imposing a $6 billion tax on insurance companies and fining families $3,800 for not obtaining insurance coverage.
The draft contains many of the expected proposals, including the creation of a series of insurance cooperatives, but lawmakers who were reluctant to support other proposals may be more attracted to what’s not in it - namely, the public option, the employer mandate and the tax increase on wealthy Americans.
“I asked my colleagues for specific input on my proposal by [10 a.m. Wednesday] … so that we can move forward,” said Mr. Baucus, Montana Democrat, on Tuesday, adding that the committee will move forward with legislation in the “next week or so,” but that an agreement isn’t final.
The committee’s “gang of six” - three Democrats and three Republicans - was furiously trying on Tuesday to finalize what is considered the best hope of crafting a bipartisan proposal in Congress ahead of Mr. Obama’s address, in which he’s expected to “draw lines in the sand” over what proposals he can support.
The $6 billion tax on insurance companies would be used to help pay for the reform and is designed to alleviate the effort’s sticker shock that has angered some voters. Insurers will have potentially millions of new customers because of the individual mandate.
But Sen. Charles E. Grassley, Iowa Republican, already has come out against the tax, arguing on CNN Tuesday that the tax would just be passed on to consumers. Mr. Baucus said the fee is “very important.”
White House press secretary Robert Gibbs said the Obama administration had not seen a copy of the draft bill but said it was “bouncing around K Street.”
“Not surprisingly, the special interests have gotten a copy of the plan that I understand was given to committee members today,” Mr. Gibbs said.
When pressed to explain what he meant, Mr. Gibbs said he did not know how lobbyists would have obtained copies of the draft, and he denied he was being “cryptic.”
The framework proposal from Mr. Baucus includes a series of dramatic changes for Americans.
All U.S. citizens and legal residents would be required to obtain insurance coverage as of 2013. Existing plans would be grandfathered in. Exceptions would be made for people with religious objections and for the poor - those whose insurance premiums would cost more than 10 percent of an individual’s income. Undocumented immigrants would not be required to obtain coverage and would not receive assistance.
Families who violate the requirement would face fines up to $3,800. Individuals would get a $950 fine.
Tax credits would be issued to help low- and middle-income Americans - individuals whose income is less than $32,000 or families with less than $66,000 - obtain coverage. The thresholds are less generous than the proposals in the House.
Employers would not face a straight mandate to provide coverage, but the framework contains a series of proposals to encourage them to provide plans.
Employers with more than 200 employees would be required to include employees on coverage plans, unless the employees can prove they have other coverage. Employers with more than 50 employees who don’t include their workers on plans would have to pay a fee for each employee who ends up with a government tax credit.
Individuals would not receive a tax credit if they were to turn down employer coverage. But if that coverage were deemed unaffordable - priced at 13 percent of their income or more - they could be eligible for a tax credit.
A health insurance exchange would be established in 2010 to provide consumers a one-stop place to purchase private insurance coverage or a role in a new insurance cooperative, a program in which members essentially own and create a group insurance program.
The exchanges are designed to protect consumers from fraudulent or risky insurance coverage and would set standards that insurers would have to meet in order to sell through the program. To that end, each state would be required to establish an ombudsman to act as a consumer advocate.
• Jon Ward contributed to this report.