Panel Cuts Health Act Tab - Updated

WASHINGTON BUREAU — Democrats on the Senate Health, Education, Labor and Pensions Committee say they have reduced the projected cost of implementing their health reform proposal.

Sen. Edward Kennedy, D-Mass., chairman of the HELP Committee, and Sen. Christopher Dodd, D-Conn., Kennedy’s chief deputy for health reform, today reported that the Congressional Budget Office estimates a revised version of their health reform bill would cost about $611 over 10 years.

In June, CBO analysts had projected that an earlier version of the bill, the Affordable Health Choices Act, would cost $1 trillion over 10 years.

Since the earlier version was scored, drafters have accepted 87 Republican amendments and made a number of other changes, Kennedy and Dodd write in a letter to Republican HELP Committee members.

Two changes that have had a big effect on projected costs are the addition of a public health insurance option – the Community Health Insurance Option program – and a move to impose fees on employers that fail to provide health coverage, Kennedy and Dodd write.

The CHIO provision calls for the U.S. Department of Health and Human Services to administer a national CHIO plan and negotiate plan rates and premiums. The CHIO plan would be sold alongside private health insurance plans through a new health insurance distribution system, the Health Insurance Gateway.

The employer responsibility provision would require employers with 25 or more employees to provide health coverage for workers. The bill would impose a $750-per-worker annual fee on affected companies that do not offer coverage to employees. The annual fee for part-time workers would be $375.

The employer fee could generate about $52 billion in revenue over 10 years, according to HELP Committee data. The committee wants to use the revenue to provide subsidies for individuals who cannot afford health insurance.

The new plan should help cover 97% of the U.S. population, Kennedy and Dodd write.

The plan was unveiled as the HELP Committee, the Senate Finance Committee and a number of House committees prepare to mark up legislation that would reform the current health finance system.

Work is expected to start Monday, as Congress returns from its July Fourth recess.