June 7, 2009 / 12:37 AM / 10 years ago

U.S. healthcare revamp to require medical coverage

WASHINGTON (Reuters) - U.S. lawmakers plan far-reaching insurance market reforms, and would require that businesses and individuals purchase medical coverage as they seek to overhaul the U.S. healthcare system, an early draft of Senate legislation said on Saturday.

U.S. President Barack Obama signs the $32.8 billion expansion of the State Children's Health Insurance Program, or SCHIP, at the White House in Washington February 4, 2009. The SCHIP program aims to help working families who cannot afford private health insurance but earn too much to qualify for Medicaid healthcare coverage for the poor. REUTERS/Kevin Lamarque

The legislation seeks to provide health coverage for all Americans and would prohibit insurance companies from refusing to cover anyone because of health history. It also would outlaw annual or lifetime limits on coverage.

The bill would require individuals and businesses to purchase insurance. The business community is likely to raise strong objections to the employer requirement in the measure, being drafted by the Senate Health, Education, Labor and Pensions Committee headed by Senator Edward Kennedy.

The sweeping healthcare overhaul is a top legislative priority for Democratic President Barack Obama, who says he wants Congress to send him a bill by October.

To help small businesses and individuals without employer-provided insurance, the Kennedy committee bill would establish government operated “gateways” for them to purchase affordable medical coverage. The gateway, or insurance exchange as some have called it, would act as a clearinghouse that would help customers compare plans and prices.

The bill also provides for a sliding scale of subsidies to help people with incomes up to 500 percent of the poverty level purchase insurance. Exceptions would be made for poor people and some small businesses. The bill also would make millions more people eligible to join the Medicaid health program for the poor.

Kennedy’s committee is one of two writing the massive overhaul. The Senate Finance Committee headed by Senator Max Baucus is working on similar legislation and also will decide how to pay for the subsidies and a proposed new government plan that many Democrats want to compete with private insurers.

Republicans and insurance companies oppose the idea of a new public plan, arguing that it would drive many firms out of business and lead to a total government system.

Kennedy’s spokesman Anthony Coley said the legislative language that was being widely circulated in Washington was an earlier draft of the bill.

Lawmakers are still fine-tuning the details in closed door sessions with an aim toward holding open committee sessions in the next few weeks. Both Baucus and Kennedy have said they would like to achieve broad bipartisan support on the bill, which is expected to be brought to the Senate for a vote in July.

Reporting by Donna Smith, editing by Patricia Zengerle

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