The House weighs in

Laying down their marker in the health-care reform debate, House Democrats unveiled Thursday a legislative package touted as covering 96 percent of the population at a cost of $894 billion over 10 years.

Although it includes a government-run insurance plan, the lightning rod in the debate, the plan mostly builds on the current system of employer-provided health care. It requires big firms to cover workers or pay a penalty and offers subsidies to smaller companies to insure their workforce. Most individuals would be obligated to buy insurance although people with lower incomes would receive subsidies and Medicaid would be expanded, with the federal government picking up most of the tab.

Individuals and small companies would buy insurance at an exchange that offers basic policies. The public plan would be an option, but its rates would be negotiated with providers, a concession to moderate lawmakers by House Speaker Nancy Pelosi, who preferred using Medicare rates plus 5 percent.

Although the public plan is the most contentious issue in the debate, only a small fraction of Americans would be able to buy into it, belying the dire "government takeover" warnings of insurance companies and Republicans.

While insurers would get millions of new customers, they also face new restrictions, such as bans on denying coverage for pre-existing conditions, limits on what they can spend on advertising and bonuses and expanded scrutiny of industry practices.

It's paid for with an income tax surcharge on the wealthiest Americans and cuts in Medicaid and Medicare spending, including an end to subsidies to insurance companies for Medicare Advantage policies.

The House plan is more comprehensive than the hodgepodge the Senate is considering, but its virtues may become hostage to the political realities of fashioning a final bill that commands majority support in both houses. The ultimate version, though, must expand coverage, curb insurance company abuses and cut long-term health spending.