After a month of mark-ups, amendments and compromise, the Senate’s Health, Education, Labor and Pensions Committee has passed legislation to overhaul U.S. healthcare.

The HELP Committee’s legislation includes a government-run health insurance plan, which “responds to the wishes of the American people to have a clear alternative” to for-profit insurance companies, according to a statement by the committee.

Edward M. Kennedy

In a 13-10 vote along party lines, the committee, chaired by Sen. Ted Kennedy (D-Mass.), approved the Affordable Health Choices Act, which must now be approved by both chambers of Congress and President Barack Obama.

The Congressional Budget Office estimates the bill to cost less than $615 billion over the first 10 years. The bill does not address how to cover the cost.

The public plan, identified as the Community Health Insurance Option, will be available through the American Health Benefit Gateway, a new way for individuals and small employers to find and purchase “quality and affordable” coverage nationwide. This public plan option has been endorsed by Obama, who called it a way to keep private insurers “honest.”

The bill requires that every American carry health insurance, offering discounts for those having trouble affording a plan, and also prohibits denial of health coverage due to pre-existing conditions or coverage that fails to help when it is needed most.

Employers with more than 25 employees who do not offer qualifying coverage or who pay less than 60% of their employees’ monthly health premiums would pay a $750 annual fee per uninsured full-time employee and $375 per uninsured part-time employee.

In a statement, Kennedy said he “could not be prouder of the work of the committee,” which has been lead by Sen. Chris Dodd (D-Conn.) in his absence, as he deals with lingering health issues.

“We have done the hard work that the American people sent us here to do,” Kennedy said. “We have considered hundreds of proposals. Where we have been able to reach principled compromise, we have done so. Where we have not been able to resolve our differences, we have treated those with whom we disagree with respect and patience.”

Kennedy urged bi-partisan compromise on the bill “so that the great promise of quality affordable health care for all can be fulfilled.”

Dodd said the legislation meets a need. “The American people demanded legislation that protects their choice of doctors, hospitals, and insurance plans; cuts costs for families, businesses, and the federal government; and ensures that, in the wealthiest nation in the world, everyone has access to affordable, high-quality care,” Dodd said.

“This time, we have produced the legislation Americans wanted,” he said. “This time, we have delivered on the promise of real change.”

In the House of Representatives, a $1.5 trillion health reform plan, unveiled July 14, addresses cost through tax hikes, which would pay the estimated $540 billion over the next decade. The tax hikes would begin in 2011 on families earning more than $350,000, according to Rep. Charles Rangel (D-N.Y.).