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Under Senate health care plan, you still pay

President Barack Obama speaks about health care during a town hall meeting at the Northern Virginia Community College in Annandale, Va., Wednesday, July 1, 2009. (AP Photo/Alex Brandon)

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President Barack Obama gestures as he answers questions during a discussion on health care, Wednesday, July1, 2009, at Northern Virginia Community College in Annandale , Va. (AP Photo/Pablo Martinez Monsivais)

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By RICARDO ALONSO-ZALDIVAR, The Associated Press Updated 7:25 PM Friday, July 3, 2009

WASHINGTON — First you paid to insure your car. Soon you may have to add health insurance premiums to that stack of monthly bills as well.

In a revamped health care system envisioned by senators, people would be required to carry health insurance just like motorists must get auto coverage now. The government would provide subsidies for the poor and many middle-class families, but those who still refuse to sign up would face fines of more than $1,000.

The details were unveiled Thursday in a health care overhaul bill supported by key Senate Democrats looking to fulfill President Barack Obama's top domestic priority.

The Congressional Budget Office estimated the fines would raise around $36 billion over 10 years. Senate aides said the penalties would be modeled on the approach taken by Massachusetts, which now imposes a fine of about $1,000 a year on individuals who refuse to get coverage. Under the federal legislation, families would pay higher penalties than individuals.

Called "shared responsibility payments," the fines would offset at least half the cost of basic medical coverage, according to the legislation. The goal is to nudge people to sign up for coverage when they are healthy, not wait until they get sick.

In 2008, employer-provided coverage averaged $12,680 a year for a family plan, and $4,704 for individual coverage, according to the Kaiser Family Foundation's annual survey. Senate aides, who spoke on condition of anonymity because they were not authorized to speak publicly, said the cost of the federal plan would be lower but declined to provide specifics.

The legislation would exempt certain hardship cases from fines, which would be collected through the income tax system.

The new proposals were released as Congress neared the end of a weeklong July 4 break, with lawmakers expected to quickly take up health care legislation when they return to Washington. With deepening divisions along partisan and ideological lines, the complex legislation faces an uncertain future.

Obama wants a bill this year that would provide coverage to the nearly 50 million Americans who lack it and reduce medical costs.

In a statement, Obama welcomed the legislation, saying it "reflects many of the principles I've laid out, such as reforms that will prohibit insurance companies from refusing coverage for people with pre-existing conditions and the concept of insurance exchanges where individuals can find affordable coverage if they lose their jobs, move or get sick."

The Senate Health Education, Labor and Pensions bill also calls for a government-run insurance option to compete with private plans as well as a $750-per-worker annual fee on larger companies that do not offer coverage to employees.

Sens. Edward M. Kennedy, D-Mass., and Christopher Dodd, D-Conn., said in a letter to colleagues that their revised plan would cost dramatically less than an earlier, incomplete proposal, and help show the way toward coverage for 97 percent of all Americans.

The Congressional Budget Office, in an analysis released Thursday evening, put the net cost of the proposal at $597 billion over 10 years, down from $1 trillion two weeks ago. Coverage expansions worth $645 billion would be partly offset by savings of $48 billion, the estimate said.

However, the total cost of legislation will rise considerably once provisions are added to subsidize health insurance for the poor through Medicaid. Those additions, needed to ensure coverage for nearly all U.S. residents, are being handled by a separate panel, the Senate Finance Committee. Bipartisan talks on the Finance panel aim to hold the overall price tag to $1 trillion.

The Health Committee could complete its portion of the bill as soon as next week, and the government health insurance option virtually assures a party-line vote.

In the Senate, the Finance Committee version of the bill is unlikely to include a government-run insurance option. Bipartisan negotiations are centered on a proposal for a nonprofit insurance cooperative as a competitor to private companies.

Three committees are collaborating in the House on legislation expected to come to a vote by the end of July. That measure is certain to include a government-run insurance option.

At their heart, all the bills would require insurance companies to sell coverage to any applicant, without charging higher premiums for pre-existing medical conditions. The poor and some middle-class families would qualify for government subsidies to help with the cost of coverage. The government's costs would be covered by a combination of higher taxes and cuts in projected Medicare and Medicaid spending.

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July 03, 2009 11:25 AM EDT

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I am aghast at Mr. Zoldivar's reticence to paying for health care insurance. I have paid for it all my life and I think most people, if they re-arrange their priorities, can also pay. I resent any attempt to cut Medicare benefits or to take Medicare Advantage away from the 9 million seniors who have it. They need to concentrate on eliminating the abuse of Medicaid by able-bodied young people who don't work but who get quack doctors to attest to their inability to work.

seniorcit.
4:14 PM, 7/8/2009

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Obama is going to make sure everyone has health care and people stupid enough to think it will be free are in deep need of a dose of reality. I wish they would show me in the Constitution where it says health care is a must. It does not. Nobody gets refused health care if they are sick. But this president is looking for a way to get rid of older people. What a better way. Deny them something they have paid for and dole it out for votes.

Joe
9:16 AM, 7/4/2009

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While I agree with this, legislators are taking the wrong approach on health care. They should be taking steps to reduce costs rather than continuing to pay outrageous fees. Costs should be capped at levels people can afford to pay and doctors put on fixed incomes. Limits also should be placed on malpractice claims and claims awarded only when reckless abandon can be proved in court.

oldtimer
8:19 AM, 7/4/2009

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I think it is a step in the right direction. People need something that they can afford. If you loose your job and get unemployment it is hard to keep up with your medical insurance when you get $1,000 and cobra demands $800.

good idea
12:53 AM, 7/4/2009

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I am for this plan that requires people to have health coverage. If you drive a car/wreck you are penalized for not having insurance. If people eat out - have cell phones- expensive shoes, they can spend for basic health coverage. With people doing their part + necessary restraints put on the drug companies, things will improve. Stopping all the advertising telling us to tell our physician we are interested in a particular drug- would enable companies to devote more dollars to research.

J
9:07 PM, 7/3/2009

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