Sweeping Health Plan Draft by Senator Kennedy

All Americans would have access to “essential health care benefits,” with no annual or lifetime limits, employers would have to contribute to the cost of coverage and the government would create a new public insurance program under sweeping legislation drafted by Senator Edward M. Kennedy and circulated Friday.

Under the legislation, the government would subsidize premiums for people with incomes up to 500 percent of the poverty level ($110,000 for a family of four), and private insurers would have to pay out a specified percentage of their premium revenues in benefits.

The new government-run program would pay doctors and hospitals at Medicare rates, plus 10 percent.

Mr. Kennedy’s bill would also establish a new insurance program to provide home- and community-based care for 10 million people with severe disabilities.

The bill gives no indication of how Mr. Kennedy would pay for his proposals, other than by requiring contributions by individuals and employers.

Anthony Coley, a spokesman for Mr. Kennedy, said the legislative language circulated in Washington on Friday was “a draft of a draft.” Democratic members of the committee “are still actively talking among themselves and their Republican colleagues,” and “there is no final policy,” Mr. Coley said.

As expected, the Kennedy bill, called the American Health Choices Act, is to the left of one being written by the Senate Finance Committee, headed by Senator Max Baucus, Democrat of Montana. Senate Democratic leaders said the two bills would be merged before going to the Senate floor — in July, they hope.

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