Democrats on a key Senate committee are readying a plan that has a government-run insurance option and a $750-per-worker annual fee on larger companies that do not offer coverage to its employees, The Associated Press reports.

"In a letter outlining the details, Sens. Edward M. Kennedy, D-Mass., and Christopher Dodd, D-Conn., said their revised plan would cost dramatically less than an earlier, incomplete proposal, and help show the way toward coverage for 97 percent of all Americans.

"The two senators said the Congressional Budget Office put the cost of the proposal at $611.4 billion over 10 years, down from $1 trillion two weeks ago. The revising also 'virtually eliminates' an earlier forecast that the proposal would cause many companies to drop coverage for their workers, they said."

The letter was sent to Senate Health, Education, Labor and Pensions Committee members. Senate Finance Committee members are working on a separate bill, likely to include co-operatives instead of a government-run plan. A House bill too is like to have a public option.

"At their heart, all the bills would require insurance companies to sell coverage to any applicant, without charging higher premiums for pre-existing medical conditions. Poorer individuals and families would qualify for government subsidies to help with the cost of coverage. The government's costs would be covered by a combination of higher taxes and cuts in projected Medicare and Medicaid spending" (Espo, 7/2).

CQ Politics: "The latest draft bill includes a government-run health insurance plan that would compete with private insurers. It also would mandate employers to provide health insurance to their workers or pay a fee instead — a so-called “pay-or-play” requirement that is opposed by many business lobbying groups but drew important support this week from Wal-Mart Stores Inc."
"Businesses with 25 or more employees that don’t offer insurance would have to pay the government $750 per worker per year, or $375 for part-time workers. Those with fewer than 25 employees would be exempt from the requirement."
"Together, the two new sections increased the bill’s coverage and reduced its cost, according to CBO. The HELP leaders said that the bill would result in very few workers losing their employer-sponsored insurance, a key concern for many lawmakers" (Wayne, 7/2).


The CBO's scores are often likely unreliable, however, further complicating reform efforts, McClatchy Newspapers/The Miami Herald reports: "Budget experts sound a warning: In a letter June 16 to senators, CBO director Douglas Elmendorf said, 'Many of the specific changes that might ultimately prove most important cannot be foreseen today, and could be developed only over time through experimentation and learning.' Key lawmakers concede that the CBO's numbers are imprecise. 'I don't think they're infallible, but CBO does the best it can,' said Rep. Henry Waxman, D-Calif., the chairman of the House Energy and Commerce Committee.