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Health care bill likely to cut employer mandate

But big firms could be facing higher penalty

PROPOSAL CLOSE TO GAINING NEEDED VOTES Senator Charles Schumer said a version of the public option would allow states not to join in a government-run program. PROPOSAL CLOSE TO GAINING NEEDED VOTES
Senator Charles Schumer said a version of the public option would allow states not to join in a government-run program.
By David Espo
Associated Press / October 26, 2009

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WASHINGTON - Businesses would not be required to provide health insurance under legislation being readied for Senate debate, but large firms would owe significant penalties if any worker needed government subsidies to buy coverage on their own, according to Democratic officials familiar with talks on the bill.

For firms with more than 50 employees, the fee could be as high as $750 multiplied by the total size of the workforce if only a few workers needed federal aid, these officials said. That is a more stringent penalty than in a bill that recently cleared the Senate Finance Committee, which said companies should face penalties on a per-employee basis.

The Democratic officials also said individuals would generally be required to purchase affordable insurance if it were available, and face penalties if they defied the requirement.

The officials spoke on the condition of anonymity, saying they were not authorized to discuss the private negotiations involving key Senate Democrats and the White House. They also stressed that no final decisions have been made on the details of the measure, expected to reach the Senate floor in about two weeks.

In a separate development yesterday, Senator Chuck Schumer, Democrat of New York, a leading advocate for a government-run insurance option, said the proposal is close to gaining the 60 votes needed to pass the Senate and probably will be in the overhaul legislation.

Speaking on NBC’s “Meet the Press,’’ Schumer said a version of the public option that is gaining wide support would allow states to choose not to participate in a government-sponsored program.

The health care overhaul bill is taking shape in private talks led by Harry Reid, Democrat of Nevada and the Senate majority leader. It is designed to answer President Obama’s call to expand coverage to millions who lack it, ban insurance industry practices such as denial of coverage for preexisting medical conditions, and slow the growth in medical spending nationally.

Like a companion measure in the House, it would create a new federally regulated marketplace, termed an exchange, in which individuals and families could purchase insurance sold by private industry. Federal subsidies would be available to help those at lower incomes afford the cost.

Subsidies would also be available to smaller businesses as an incentive for them to provide insurance.

Nominally, Reid’s task is to meld bills already passed by the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee. In reality, however, he has a virtual free hand in coming up with a measure, with a goal of amassing a 60-vote majority to overcome a threatened Republican filibuster.

Reid has told fellow senators he is strongly considering whether to include a provision for a government-run insurance plan in the bill as a way to ensure that consumers have a choice and to create competition for private companies. The Finance Committee had omitted any federal role in the sale of coverage in favor of nonprofit co-ops competing with private industry.

One critic of government-sponsored insurance, Senator Ben Nelson, Democrat of Nebraska, said on CNN he was not enthusiastic with the proposal, but did not rule out giving Reid his OK on a key procedural vote.

“Well, I certainly am not excited about a public option where states would opt out. . . . I’ll take a look at the one where states could opt in if they make the decision themselves,’’ he said.

Numerous other issues are involved in the bill.

The requirement for individuals to purchase insurance would include provisions to exempt individuals or families unable to find affordable coverage. Those who are obligated to buy coverage and refuse would face a fine of perhaps $100 in the first year of the program.

There is no penalty for individuals in the first year of the program in the Senate Finance Committee bill, a provision inserted at the request of Senator Olympia J. Snowe. The Maine Republican is the only member of her party in either house of Congress to vote for a Democratic-backed health care bill in committee this year.

The switch Reid is considering is an attempt to increase the number of people with insurance, a key goal of the legislation.

Officials familiar with the Senate negotiations said the bill is likely to maintain a federal health care program for lower-income children as a stand-alone program, rather than folding it into the broad national insurance exchange.

The legislation is also expected to include an option for states to negotiate with private industry to provide group coverage for lower-income residents.