The U.S. Senate Finance Committee approved its plan for health care reform, the last of five proposals before Congress.

Olympia Snowe

By a 14-9 vote, with just Republican Sen. Olympia Snowe of Maine joining the Democratic majority, the committee passed the bill after several weeks of debate and discussion. The bill will be merged with one passed by the Senate Health, Education, Labor, and Pensions Committee, which includes a government-run health plan to cover the uninsured. After those two bills are combined, they will have to be reconciled with the House bills.

The Senate Finance Committee’s bill, crafted by Sen. Max Baucus (D-Mont.), committee chairman, does not include a public option, a government plan for those who cannot afford insurance, although several members, including Sen. Charles Schumer (D-N.Y.), say they will seek to include it in the final bill the Senate approves. House Democrats and President Barack Obama say a public option will rein in private insurers who they say are causing rates to keep rising.

“This bill does more than any other ones [before Congress] to cut costs,” Schumer said, prior to the vote.

Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Finance Subcommittee on Health Care, said the bill is not perfect, but “the time is right.” Insurance companies “get too sweet a deal” because they get “half the money” and are not required to “contribute anything,” he said.

“The insurance industry does not know how to stop itself,” Rockefeller said. “What you have to do is put up an impediment…and that is the public option.”

The bill also includes an excise tax on insurers of 40% for so-called “Cadillac” plans, the most expensive offered by insurance companies. The tax would apply on plans worth more than $8,000 and family plans worth at least $21,000 annually beginning in 2013.

Snowe, who admitted during the discussion today that the Democratic majority in both houses has enough votes to pass reform, and other committee members say they will work to tweak the components of the bill when the full Senate and House work to create one bill from the five proposals.

Last month, Baucus unveiled his 10-year, $856 billion America’s Health Future Act, which seeks to create “consumer owned and oriented plans,” or “co-ops,” as member-run mechanisms providing an alternative to private insurance companies. About $6 billion of federal seed money would be provided in start-up costs for the plans to operate at the state, regional or national level. The bill permits them to be set up for any of those three levels.

During the final markup, several committee members, both Democrats and Republicans, asked pointed questions of the Congressional Budget Office, seeking to clarify the true cost of the bill. A CBO analysis, based on the original bill’s features, determined Baucus’ bill 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.

An America’s Health Insurance Plans analysis, performed by PriceWaterhouseCoopers, suggested passage would nearly double the cost of health insurance for the average family.

Sen. Bob Menendez (D-N.J.) called the AHIP study “deeply flawed,” saying he supports the bill. He said the bill “goes a long way” to improve affordability and coverage for those who cannot afford coverage.

Menendez added that he wished more had been done to make health care affordable if a mandate is imposed on individuals. He said he would seek the public option in further discussions on health care reform, calling it the only way to keep costs down