Sun May 31, 2009 8:34am EDT

By Donna Smith

WASHINGTON (Reuters) – Democratic plans for revamping U.S. healthcare are taking shape, with Senator Edward Kennedy soon to announce a proposal which could form the core of the nation’s new health system.

Kennedy, a Democratic stalwart whose thinking is widely believed to track that of President Barack Obama on healthcare, is expected to unveil a plan in early June that will include both a new government program to provide medical coverage for all as well as a mandate that every American acquire some form of health insurance.

The two elements—government insurance and mandatory coverage— have been hotly debated as Obama seeks to begin radically transforming the $2.5 trillion U.S. healthcare industry by the end of the year.

Kennedy, who has made medical coverage for the uninsured a goal of his four-decade career, outlined elements of the bill in a column published this week in the Boston Globe.

The 77-year-old senator said the proposed law would establish a "gateway" for people without insurance or those who wish to change insurers to compare prices, and he made clear a government-run plan will be one of the options available.

"We’ll negotiate with insurance companies to keep premiums and copays low and help you with your premiums if you can’t afford them," Kennedy wrote.

"We’re also hearing that some Americans want the choice of enrolling in a health insurance program backed by the government for the public good, not private profit—so that option will be available too," added Kennedy.


Kennedy did not specify how a public policy will be designed. But any new government insurance plan to compete with private insurers would likely spark debate among lawmakers and could inspire fresh opposition to the overhaul as Congress reconvenes this week after a break.

Although Kennedy has remained behind the scenes since he was diagnosed with brain cancer last year, he is a powerful force in the healthcare debate.

"He’s got extraordinary experience and is respected by his colleagues and he is intent on making healthcare reform the crowning achievement of more than four decades in the Senate," said Richard Kirsch of Health Care for America Now, a grassroots advocacy group that wants a new government insurance plan to compete with private insurers.

Ron Pollack, executive director of Families USA, a health reform advocacy group, said that while changes were inevitable, Kennedy will "play an enormously effective role" in shaping a final bill that adheres as closely to his vision "as practical politics allows."

Obama has said he wants to sign legislation by the end of the year that aims to rein in soaring costs and expand coverage for the uninsured.

Kennedy chairs the Health, Education, Labor and Pensions Committee, one of two Senate panels that have primary responsibility for crafting the final legislation.

The other, the Senate Finance Committee, is led by Senator Max Baucus, a Montana Democrat who is developing his own draft bill, which he hopes can win support from Democrats as well as Republicans leery of too great a government role in the new healthcare system.


How the two draft bills balance out remains to be seen. The two chairmen have told Obama they plan to develop complementary bills. The Finance Committee has sole jurisdiction over financing the overhaul and shares jurisdiction with Kennedy’s committee on Medicare and other elements of the measure.

Kennedy spokesman Anthony Coley said health committee members will discuss the proposal in closed-door sessions next week. It is unclear whether Kennedy, who was made only sporadic appearances in Washington since his cancer diagnosis last year, will lead those discussions.

Industry observers as well as healthcare advocates will be paying close attention to how exactly Kennedy sketches out his vision for government-provided insurance.

Republicans and private insurers argue Kennedy’s plan would drive insurers out of business and lead to a complete government takeover of healthcare. Democrats argue it would inject much needed competition into the insurance market and help keep a lid on soaring insurance premiums.

Health industry sources said they also expect the Kennedy bill to expand the Medicaid health program for the poor to cover more low and moderate income people.

They also expect it to include an expansion of Medicare to help cover people over 55 who often find it hard to obtain coverage when they lose their employer-sponsored insurance. Currently, only those 65 or older qualify for the Medicare health program for the elderly.

(Editing by Todd Eastham)

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[Source: Reuters]