Sen. Reid's health care plan carries $849 billion price tag

WASHINGTON -- Setting up a historic year-end debate, Senate Democratic leader Harry Reid revealed his long-awaited version of legislation to reshape the nation's health-care system last night, a measure designed to extend coverage to 94 percent of eligible Americans and bar private industry from denying insurance because of pre-existing medical conditions.

The Democrat's $849 billion measure relies on cuts in future Medicare spending to cover costs -- as well as on higher payroll taxes for the well-to-do and a new levy on patients undergoing elective cosmetic surgery.

Aides said the mammoth, 2,074-page bill would reduce deficits by $127 billion over a decade and by as much as $650 billion in the 10 years that follow, citing as-yet-unreleased estimates by the Congressional Budget Office.

"Tonight begins the last leg of this journey," said the Nevada Democrat, less than two weeks after the House approved its version -- and nearly 10 months after President Barack Obama's Inauguration Day summons to action.

Obama welcomed Reid's action, saying, "Today, thanks to the Senate's hard work, we're closer than ever to enacting solutions to these problems. I look forward to working with the Senate and House to get a finished bill to my desk as soon as possible." There was no mention of Obama's longtime goal of signing legislation by year's end.

Republicans vowed a protracted struggle to block the legislation and deny the president a victory that would cap a tumultuous first year in office.

"This bill has been behind closed doors for weeks," said Sen. Mitch McConnell of Kentucky, the Republican leader. "Now, it's America's turn, and this will not be a short debate. Higher premiums, tax increases and Medicare cuts to pay for more government. The American people know that is not reform."

The bill's first test is expected tomorrow or Saturday, with a procedural vote required to start debate.

Reid's Senate measure would require most Americans to carry health insurance and would provide hundreds of billions of dollars in subsidies to help those at lower incomes afford it. It also would mandate that large companies to provide coverage to their workers.

Beginning in 2014, it would set up new insurance marketplaces -- called exchanges -- primarily for those who now have a hard time getting or keeping coverage. Consumers would have the choice of purchasing government-sold insurance, an attempt to hold down prices charged by private insurers. Reid announced two weeks ago the plan would also include an option that let states drop out of the system.

In general, Reid proposed an outline that is similar to the $1.2 trillion House-passed bill, but there were important differences:

* The House version would require all but the smallest businesses to offer insurance, while the Senate measure would merely fine companies for not offering affordable coverage.

* The Senate bill would bar illegal immigrants from buying insurance through the exchanges, while the House would restrict access only to subsidies and federal programs such as Medicaid.

* The House would impose a 5.4 percent surtax on income over $500,000 for individuals and $1 million for families; the Senate would rely primarily on a new tax on high-cost insurance policies that has been hugely unpopular among House members.