Democrats push for new government health plan

By Donna Smith

WASHINGTON (Reuters) - Democrat lawmakers on Friday proposed guaranteeing health coverage for nearly every American, despite mounting concerns the cost of doing so could torpedo the Obama administration's healthcare reform effort.

In the latest draft of the healthcare bill, Democrats in the U.S. House of Representatives suggested all citizens should be able to get insurance regardless of medical history and that coverage should be mandatory for individuals and businesses.

The proposal would create a new government plan to help cover the uninsured -- a move backed by President Barack Obama but resisted by Republicans and some centrist Democrats who fear it will overwhelm private insurers and require vast amounts of public funding.

Republicans, the minority party in Congress, have set out their own more modest healthcare changes, but they lack the votes in either the House or the Senate to push them through or derail the Democrats' health reform drive.

They are seeking instead to moderate coming reforms and are focusing on the cost of restructuring the healthcare system, which is projected at more than $1.5 trillion -- a huge expense for a nation carrying record budget deficits.

The Democrats' bill would create new health insurance exchanges where people shop around for coverage. But whether or not a government-run plan has a role in these exchanges remains the subject of serious political debate.

Energy and Commerce Committee Chairman Henry Waxman, a Democrat, said the public plan, if self-sufficient and sustained through premiums rather than government handouts, would improve competition in the healthcare insurance market.

"We want to keep everyone honest, and competition is the best way to do it," Waxman said.