Senator Baucus adjusts health plan to make it more affordable

WASHINGTON (Reuters) - Senate Finance Committee Chairman Max Baucus revised his healthcare reform bill on Monday to ease concerns among fellow Democrats about the affordability of insurance requirements for low- and middle-income families.

The shift came one day before the committee begins consideration of a sweeping overhaul of the $2.5 trillion industry, President Barack Obama's top domestic priority.

Committee members have filed 564 potential amendments to the Baucus proposal -- many focused on ways to reduce costs for individuals and make insurance more affordable under the plan.

In response, a Democratic source familiar with the talks said, Baucus has adjusted his proposal to help ensure that people at all income levels could afford insurance.

"We had a number of amendments filed to reduce the penalty imposed for not purchasing insurance and to make sure that families at all income ranges can afford the lower cost insurance to be provided through the exchange," the source said.

Baucus would pay for the changes with $28 billion in surplus from the bill, the source said, a move bolstered by last week's estimate from the Congressional Budget Office that the proposal would reduce the deficit by $49 billion over 10 years.

Under the plan Baucus unveiled last week, all U.S. citizens and legal residents would be required to obtain health insurance, with subsidies offered on a sliding scale to help people buy it.

AMENDMENTS ABOUND

It would create state-based exchanges where individuals and small businesses shop for insurance. The proposal would levy fees on healthcare companies and insurers, tax high-cost insurance plans and expand Medicaid, the healthcare system for the poor.

Many Democrats have questioned whether the subsidies are generous enough. Committee Democrats offered amendments to increase the subsidies, reduce penalties for not obtaining insurance and curtail the tax on high-cost plans, which they fear could be passed on to consumers.

Other amendments would require a government-run public insurance option, which is not included in the bill, and strike the bill's alternative provision for nonprofit cooperatives to inject competition into the insurance market.

Obama has pushed for a sweeping overhaul that would rein in costs, create competition for insurers and expand coverage to many of the 46 million uninsured people living in the United States -- his top domestic priority.

But the initiative has been besieged by critics and slowed by battles in Congress, where elements of the insurance and healthcare industries have lobbied hard against parts of the plan.

The Senate panel is the last of five congressional committees with healthcare jurisdiction to take up a bill. It is expected to spend at least three days working its way through the amendments before a final vote.

Despite months of negotiations with three Republican committee members, Baucus so far has been unable to win any Republican support for the bill.

He planned to meet on Monday evening with committee Democrats to explain his adjustments in the measure.

(Editing by David Alexander and Chris Wilson)