Senior senator launches health reform plan

By Donna Smith

WASHINGTON (Reuters) - The head of the U.S. Senate Finance Committee on Wednesday said the health-care system is a strain on the economy and unveiled a sweeping reform plan that would eventually require all Americans to obtain insurance.

Chairman Max Baucus, a Montana Democrat, proposed creating a new insurance exchange through which millions of uninsured Americans and businesses could obtain affordable health cover. Subsidies would be available for those who otherwise would not be able to afford insurance.

"The health-care system is broken for individual Americans and is straining our economy," Baucus said. For that reason, he said he would like President-elect Barack Obama and Congress to push for quick action, perhaps passing legislation in the first half of next year.

The proposal, which drew quick praise from health-care advocates, is similar to the plan outlined by Obama during his presidential campaign.

The biggest difference is Baucus would eventually require everyone to obtain insurance while Obama proposed a plan aimed at making health coverage more affordable but not mandatory.

Baucus, who as head of the tax-writing Finance Committee will play a major role in crafting any health-care legislation, said he plans to work closely with Obama and other lawmakers, including Massachusetts Democrat Sen. Edward Kennedy, who heads Senate health, education and labor committee.

Any overhaul also would have to be approved by the U.S. House of Representatives, as well as pass muster with Obama, who takes office in January.

"Health-care reform is a big project that involves tough choices," Baucus said at a news conference. "We need to work together."

That also includes winning support from Republicans who favor a more market-oriented approach through tax breaks to encourage people to buy health insurance.

The proposal by Baucus, seen as a strategic move to launch the health-care policy debate in Congress, would provide a mix of tax breaks and mandates to reshape the health-care system into what he said would be a more efficient structure.

Rather than putting forward specific legislation, Baucus outlined his proposal in an 87-page blueprint for action.

The plan anticipates that most Americans will keep the insurance coverage they have, which most often comes through employers. Baucus would encourage large employers to provide health insurance and those who do not would have to pay into a fund to help cover the uninsured.

Subsidies would be available for small businesses and individuals to help them obtain affordable insurance.

Baucus said it would take about three years to set up the exchange, a kind of marketplace where people could shop for insurance plans. In the meantime, he would use Medicare and Medicaid government health care programs for the elderly and poor to expand coverage for the uninsured.

He said the reform would be expensive, although he did not say how much, but added that doing nothing would cost the U.S. economy even more. Soaring health-care costs are a major concern for businesses and individuals struggling to cope with a U.S. economy in recession.