Ahead of President Obama’s address on health care, Senate Finance Committee Chairman Max Baucus (D.-Mont.) is having his say.

The draft framework of the Baucus bill foregoes a public option and instead creates a network of nonprofit health coverage cooperatives and expands the scope of the Medicaid program for the poor.

The bill also includes new strictures for insurers by limiting out-of-pocket expenses for patients, and barring insurers from placing caps on benefits or excluding patients due to pre-existing conditions. To help pay for this expansion of coverage, Baucus proposes a 35% excise tax on insurance companies and insurance administrators for any health insurance plan that is above $8,000 for singles and $21,000 for family plans.

The plan also mandates a “health insurance provider fee” that would impose an annual levy of $6 billion on the health insurance sector beginning in 2010. Their market share would determine the amount of the fee insurers would pay.
While health insurers will be operating under a raft of new regulations, if the Baucus bill comes to fruition, they will have plenty of new customers. Beginning in 2013, Baucus would require all U.S. citizens and legal residents to purchase health insurance or have health coverage from an employer or through a public program.

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