WASHINGTON — Key Senate Democrats, bidding for bipartisan support on health care Thursday, pared back subsidies designed to make insurance more affordable and floated a compromise that rules out direct government competition against private insurers.
Despite the cost-cutting, the proposal backed by Sen. Max Baucus, chairman of the Senate Finance Committee, requires most individuals to purchase coverage and forbids insurance companies from denying it on the basis of pre-existing medical conditions.
The brief outline did not specify how the government’s costs would be covered, although Baucus and many Republicans favor a tax on certain employer-provided health benefits. The Montana Democrat has said he intends to hold the cost of the legislation to about $1 trillion, well below the $1.6 trillion estimate the Congressional Budget Office made of an earlier set of options.
Across the Capitol, Democrats on the House Ways and Means Committee privately circulated a list of possible tax increases to pay for expanded health care.
They ranged from raising the Medicare tax, slapping a 10-cents-per-can increase on sweetened drinks, raising the alcohol tax, imposing a new payroll tax on employers equal to 3 percent of their health care expenditures and taxing employer-provided health insurance benefits above certain levels.
Also under consideration was a value-added tax, a sort of national sales tax, of up to 1.5 percent or more, with housing, education, financial services and medical care potentially exempt.
