Sen. Edward Kennedy and colleagues have released a health reform proposal that would create new coverage options and let employees pay for long term care insurance with pretax income.

Kennedy, D-Mass. who helped guide efforts to develop the proposal while coping with the effects of brain cancer, says lawmakers tried to strengthen what works and fix what doesn’t.

“Over the next few days, we will continue working with our Republican colleagues on common sense solutions that reduce skyrocketing health care costs, assure quality care for all and provide affordable health insurance choices,” Kennedy, the chairman of the Senate Health, Education, Labor and Pensions Committee, says in a statement about the 615-page Affordable Health Choices Act bill.

Sen. Mike Enzi, R-Wyo., the highest-ranking Republican on the HELP Committee, says the bill would put the country on a “partisan road to government-rationed health care.”

“We’ve been meeting with Democrats for months to discuss health care reform, but from what I’ve seen in this proposal, it doesn’t look like they listened at all,” Enzi says.

The draft of the bill posted by supporters includes provisions that seek to:

– Stop health insurers from imposing preexisting condition exclusions on purchasers of individual health coverage.

– Require guaranteed availability and guaranteed renewability of coverage.

– Require coverage of preventive services.

– Eliminate annual and lifetime benefits limits.

– Prohibit discrimination based on salary.

– Create “affordable health choices” based on the Federal Employees Health Benefit Program., by creating Affordable Health Benefit Gateways in each state that would use federal grants to set up voluntary health insurance purchasing mechanisms for individuals and small employers. Each gateway would have to offer a public health insurance option. Section 3116, which appears to be meant to describe the public health insurance option, instead includes a note that the policy in this area is still under discussion.

– Make it clear that employers and individuals share responsibility for making sure that individuals have health coverage. The section describing how employer responsibility for coverage would be implemented is still under discussion.

– Create and expand a variety of health programs, such as school health programs, health information technology programs, and health education student aid programs.

– Support programs that would help elderly people and disabled people stay in their own homes.

– Make long term care insurance eligible for inclusion in cafeteria plans.

AHIP Reaction

America’s Health Insurance Plans, Washington, is criticizing the public health insurance component of the proposal.

“A government-run plan would dismantle employer-based coverage, significantly increase costs for those who remain in private coverage, and add additional liabilities to the federal budget,” AHIP spokesman Robert Zirkelbach says in a statement.

But AHIP is welcoming congressional efforts to develop the bill.

“We strongly believe that now is the time for comprehensive, bipartisan health care reform,” “We are currently reviewing the legislation and look forward to a broad discussion on the workability of the proposed reforms.”