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VEIL OFF $856B HEALTH REFORM

Rocks start flying immediately after Sen. Max Baucus' health care reform plan is announced.

WASHINGTON - Senate Finance Committee Chairman Max Baucus on Wednesday unveiled a centrist health care reform blueprint that promised changes of historic proportions, even though it omitted the controversial "public plan" option demanded by liberals.

Marking a major milestone in the drive to overhaul health care, the yearlong effort also makes good on President Barack Obama's pledge not to add "one dime" to budget deficits, with Baucus, D-Mont., producing a bill that would cost $856 billion over 10 years, compared to the $1trillion-plus versions pending in the House.

The Baucus proposals, which have already drawn fire from liberals but may serve as a template for eventual compromise in the Senate, would sharply expand consumer protections and for the first time require almost all Americans to have medical insurance - with the government providing hundreds of billions of dollars to help low- and middle-income people pay their premiums.

Many of the bill's major provisions would be delayed until 2013, after the next presidential election.

"This is probably one of the largest pieces of social legislation in American history since the Depression," Baucus said.

But after working for months on the package with three Republicans and two Democrats - the so-called Gang of Six - Baucus stood alone at the lectern when he unveiled it, and he acknowledged that the legislation may be substantially revised by the full Finance Committee.

That point was underscored Wednesday by the White House. Press secretary Robert Gibbs called the proposal "an important building block (that) gets us closer to comprehensive health reform," Obama's signature domestic initiative, but he added that the White House expects that "Republicans certainly on the committee will offer amendments to change the bill."

Although she decided not to endorse the package, Sen. Olympia Snowe of Maine, a moderate Republican member of the Gang of Six, insisted that prospects for a bipartisan deal are not dead.

"Those of us as members of the bipartisan Group of Six fully intend to keep meeting, moving forward and continuing to work with the chairman during the committee process," Snowe said Wednesday in a statement, "toward crafting a bill that I, and hopefully other Republican members of the Finance Committee, can support."

Most other Republicans were far less charitable.

"This partisan proposal cuts Medicare by nearly a half-trillion dollars, and puts massive new tax burdens on families and small businesses, to create yet another thousand-page, trillion-dollar government program," said Senate Republican leader Mitch McConnell of Kentucky. "Only in Washington would anyone think that makes sense, especially in this economy."

The Baucus proposals drew praise from centrist Democrats whose crucial support has been elusive, especially those from relatively conservative states.

"It's a strong step in the right direction," said Sen. Mary Landrieu, D-La.

But liberals mobilized to change - or even oppose - the bill because it provided less-generous subsidies for families of modest means and no guarantee that insurance companies won't charge exorbitant premiums.

"I continue to be concerned about affordability for hard-working, middle-class families," said Sen. Ron Wyden, D-Ore. "A lot of them can't get by now. And the prospect of paying significantly more ... or being penalized, that is not going to meet their test of health care security."

In addition, Baucus' plan would not go as far as other leading proposals to reduce the ranks of the uninsured. The Congressional Budget Office said that Baucus' bill would still leave 25 million people uninsured in 2019. About a third of them would be illegal immigrants.

By contrast, the budget office said, 17 million people would be left uninsured under the House bill. At least 46 million people are now uninsured.

The CBO said the $856 billion cost of Baucus' bill would be fully offset by new taxes and fees, along with savings squeezed from Medicare, so it could reduce the cumulative total of federal budget deficits by $49 billion over the next 10 years.

At the end of that period, it said, new revenues and savings would be growing faster than costs, so the bill could also help reduce deficits in the decade after 2019.

There was not much evidence that the idea Baucus has touted of establishing nonprofit cooperatives as an alternative to a new government insurance plan would have much effect.

"They seem unlikely to establish a significant market presence in many areas of the country," the CBO concluded in its review of the Baucus proposal.

Both sides will have a chance to amend the bill when it comes before the Senate Finance Committee next week and the full Senate later this fall. But throughout the process, lawmakers will be making and remaking the kinds of tradeoffs that went into the Baucus bill.

"There are some on both sides of the aisle who think I have gone too far," Baucus said in a news conference. "It's an effort to get balance. It's an effort to get the bill passed."

Baucus' health care bill costs

A rundown of the new spending in Senate Finance Committee Chairman Max Baucus' health care overhaul bill, and a look at how it's paid for. The numbers are 10-year totals covering 2010-2019. Baucus pegs the overall cost of his plan at $856 billion over a decade; the Congressional Budget Office puts it at $774 billion. Baucus' aides say the discrepancy is mainly because Baucus is adding up all the costs of the bill to get a gross total, while CBO uses some net numbers.

Costs

$287 billion Expanding Medicaid and the Children's Health Insurance Program

$463 billion Subsidies to help low-income people buy insurance

$24 billion Tax credits to help small employers insure their workers

$10.9 billion Averting payment cuts to doctors under Medicare for one year

$17.4 billion Paying more for prescription drugs for seniors under Medicare

$54 billion Wellness promotion programs in Medicare; child obesity programs Medicare; bonus payments to encourage more primary care doctors, and other assorted programs

Revenue

$215 billion Excise tax of 35 percent on insurance plans worth more than $8,000 a year per person, or $21,000 a year per family

$16.5 billion Limit to $2,000 a year the amount people can contribute to flexible spending accounts

$17.2 billion Fee on drugmakers

$40.5 billion Fee on health insurers

$30 billion Fee on medical device manufacturers

$5.6 billion Fee on clinical laboratories

$20 billion Penalties paid by uninsured individuals

$39.8 billion Penalties paid by employers for employees who enroll in government-subsidized care: $27 billion.

$500 billion Cuts to Medicare, Medicaid and other government health programs

Sources: Congressional Budget Office, Senate Finance Committee, Joint Committee on Taxation

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