While the Senate Finance Committee now has the price tag on its reform bill, one of the mechanisms to pay for coverage is under attack in the House.

Max Baucus

A Congressional Budget Office analysis of the America’s Health Future Act, proposed by committee chairman Max Baucus (D-Mont.) found that the proposed legislation would cost $829 billion over the next decade, while covering 94% of all Americans. The non-partisan budget office determined that the bill would actually reduce federal budget deficits by $81 billion over the next decade and would reduce the number of uninsured Americans by 29 million, leaving about 25 million uninsured.

In a statement, Baucus said he was pleased with the cost and coverage estimates, but “most importantly, [the bill] improves and expands health care coverage for tens of millions of American families.”

“This legislation is a smart investment on the federal balance sheet, and it’s an even smarter investment for American families, businesses and our economy,” Baucus said. “Health reform will modernize the health care system for the 21st century by reducing inefficiencies, focusing on quality and ensuring we are getting the best bang for our health care buck. Health reform should be fiscally responsible as it expands and improves coverage, and these numbers reiterate that real reform can be just that.”

As the Senate Finance Committee prepares this week to finalize their bill, one of the elements sure to generate discussion is a tax on so-called “Cadillac” insurance plans, the most expensive offerings by insurers.

Baucus is currently proposing a 40% excise tax on insurers for individual health plans worth more than $8,000 and family plans worth at least $21,000 annually.

That proposal is coming under fire in the form of a letter signed by 156 members of the House, authored by Rep. Joe Courtney (D-Conn.), which urges Speaker of the House Nancy Pelosi (D-Calif.) to reject any such tax.

“As Congress continues to work on comprehensive health care reform, it is important that we remember who we are fighting for and ensure that the people we are trying to help the most, aren’t hurt the most,” Courtney said in a press conference. “This letter should send a clear signal to House Leadership that an excise tax on health plans will be an additional and substantial tax burden on working families. A majority of Democrats believes that is the wrong direction for health care reform.”

Rep. Sander Levin (D-Mich.) added that a tax on health benefits “undermines a basic principle of the reform proposals – to build on the employer-based health care system,” as the tax is estimated to affect 15% of all employer-provided plans in the first year. By the seventh year, he added, it would affect 40% of all employer-based plans.

“Inclusion of an excise tax on high cost insurance plans …could have significant and detrimental implications for millions of middle-class Americans,” the letter concludes.