FACTBOX-Details of Baucus plan for U.S. healthcare reform

(For more coverage of U.S. healthcare reform [nN20512341])

Sept 16 (Reuters) - Senate Finance Committee Chairman Max Baucus on Wednesday released his long-awaited proposal to overhaul the U.S. healthcare system, President Barack Obama's top domestic priority.

The Baucus plan -- with a price tag of $856 billion over 10 years -- calls for sweeping insurance market reforms and payment system changes, as well as requirements for all citizens and legal residents to buy insurance. [ID:nN16122453]

It does not include a controversial government-run "public" insurance option but calls for non-profit cooperatives to create competition in the insurance market and reduce costs.

Following are details of the Baucus proposal:

INSURANCE MARKET REFORMS

* Creates state-based exchanges where individuals and small businesses can shop for insurance.

* Four categories of minimum benefits would be offered through the exchange. A separate policy offering catastrophic coverage for young adults, a so-called "young invincible" plan, would be offered.

* Beginning in 2013, insurance companies would no longer be able to exclude people from coverage based on pre-existing conditions. Limited-benefit plans and lifetime limits on coverage would be barred. Insurers would be prohibited from rescinding health coverage.

* Provides for the sale of national plans with uniform benefits across state lines.

HEALTH COOPERATIVES

* The proposal does not contain a new government healthcare plan to compete with private plans, which is backed by Obama and liberal Democrats but opposed by Republicans and health insurers.

* The proposal provides for the creation of non-profit "consumer operated and oriented" plans or cooperatives.

* Federal loans would be provided to help with start-up costs and federal grants would be provided to meet state solvency requirements.

* The cooperatives would compete with private insurers in the non-group and small-group insurance markets.

MANDATES AND AFFORDABILITY MEASURES

* Beginning in 2013, all U.S. citizens and legal residents would be required to obtain health coverage.

* Provides a sliding scale of tax subsidies to help low and middle income people, up to 300 percent of poverty-line income, buy health insurance. People in the 300 to 400 percent range of poverty-line income would get credits if premiums exceed 13 percent of income.

* Cost-sharing subsidy available for those between 100 and 200 percent of poverty-line income.

* The proposal allows an exemption for those who cannot afford coverage.

* For taxpayers between 100 percent and 300 percent of poverty-line income, a penalty of $750 per individual with a maximum $1,500 per family would be imposed if they fail to obtain coverage.

* For those with income above 300 percent of the poverty line, a penalty of $950 per individual with a maximum of $3,800 per family would be imposed if they fail to obtain coverage.

* Medicaid, the healthcare system for the poor, would be expanded so everyone up to 133 percent of poverty-line income could qualify.

* Employers would not be required to offer health insurance but firms with 50 or more full-time workers would pay a fee for employees who get policies subsidized by federal tax credits.

* No fee would be imposed for workers enrolled in Medicaid.

REVENUE-RAISING FEES AND TAXES

* An excise tax of 35 percent would be levied on insurance companies for health plans above $8,000 for singles and $21,000 for families. The tax would apply to self-insured and group-market plans but not to plans sold in the individual market. Threshold would be indexed for inflation.

* Health insurance providers collectively would pay an annual fee of $6 billion starting in 2010. The fee would be allocated by companies' market share.

* Pharmaceutical companies collectively would pay an annual fee of $2.3 billion, allocated by market share.

* Medical device makers collectively would pay an annual fee of $4 billion, allocated by market share.

* Clinical laboratories collectively would pay an annual fee of $750 million. The fee would be allocated by market share with an exemption for small firms. (Reporting by Donna Smith in Washington; Editing by John O'Callaghan)