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House Democrats unveil healthcare plan - but what will it cost?

Price will be a major factor in winning bipartisan support, and the public insurance option could be a sticking point too.

President Barack Obama delivers remarks on the health care system at the annual meeting of the American Medical Association in Chicago, Illinois, June 15, 2009.

Jonathan Ernst/Reuters

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House Democrats on Friday unveiled their draft plan to ensure “quality affordable healthcare” for all Americans -- but without the politically critical price tag.

The plan relies on a new Health Insurance Exchange, including insurance reforms, consumer protections, and a public health insurance option. At the heart of the draft proposal are two key mandates:

Individuals must obtain insurance coverage -- or pay a penalty based on 2 percent of adjusted gross income, with exceptions for hardship.

Employers must provide health insurance for their workers -- or pay a fee based on 8 percent of their payroll, with exemptions for “certain small businesses.”

In a statement, President Obama dubbed the House healthcare reform proposal “a major step toward our goal of fixing what is broken about healthcare while building on what works.”

CREDITS FOR LOW-INCOME FAMILIES AND SMALL BUSINESSES

To broaden access to healthcare, the plan proposes credits for low- and moderate-income individuals and families on a sliding scale: Credits begin just above the proposed new Medicaid eligibility levels and gradually phase out at 400 percent of the federal poverty level ($43,000 for an individual or $88,000 for a family of four).

Small businesses that “want to provide health coverage to their workers but cannot afford it today” will be eligible for a new small business tax credit.

At the same time, the plan sets up consumer protections for all new policies. It caps annual out-of-pocket spending to prevent bankruptcies from medical expenses and bars discrimination based on an individual’s health status, including preexisting health conditions.

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