House Speaker Nancy Pelosi (D-Calif.) unveiled a health-care reform bill Thursday that includes a government insurance option, as well as a historic expansion of Medicaid, and seemed to have the potential to draw support from a broad range of Democratic lawmakers.

Democratic House aides said party leaders had yet to resolve long-standing disputes over provisions to block illegal immigrants from receiving benefits and to prevent federal funds from being used to subsidize abortions. But lawmakers also said there was a growing realization among Democrats from across the political spectrum that the time had arrived to compromise and move forward after weeks of internal battling.

"At the end of the day, we've got to pass something," said Rep. Jim McGovern (D-Mass.). "The whole debate, I hope, has been about more than just therapy."

The 1,990-page bill includes a version of the "public option" preferred by moderates and raises Medicaid eligibility levels to 150 percent of the federal poverty level for all adults, a steeper increase than in earlier drafts.

"Today we are about to deliver on the promise of making affordable, quality health care available for all Americans," Pelosi said. "We are putting forth a bill that reflects our best values and addresses our greatest challenges."

The House legislation aims to provide health insurance of one form or another to 96 percent of all Americans at an expected cost of just below $900 billion over 10 years, without increasing the federal budget deficit for at least 20 years, House Democrats said. Pelosi said the legislation "opens the doors to quality medical care for those who were shut out of the system for far too long."

But Republicans quickly dismissed the bill as an attempted government takeover of health care and said Democrats who back the measure will pay a price at the polls next November.

"The lasting image coming out of today's press conference is one of dozens of House Democrats standing proudly behind an incredibly unpopular Nancy Pelosi as she prepares to lead them off a political cliff," said Ken Spain, spokesman for the National Republican Congressional Committee.

House leaders abandoned an earlier effort to include a public option that would have established reimbursement rates to providers based on Medicare. Although the provision was backed by liberals, it lacked enough votes to pass. Rural Democrats strongly opposed the approach because of the potentially ruinous effect on doctors and hospitals in their districts, where Medicare rates are generally well below the national average.

Instead, Pelosi is offering a more moderate alternative in which rates would be negotiated between providers and federal health officials, similar to the way in which private insurance operates. Senate Majority Leader Harry M. Reid (D-Nev.) said he would include a similar provision in the Senate bill, though with an "opt out" clause for states that don't want to participate.

President Obama issued a statement hailing the introduction of the House bill as a "critical milestone" in health-care reform.

"As I've said throughout this process, a public option that competes with private insurers is the best way to ensure choice and competition that are so badly needed in today's market," Obama said. "And the House bill clearly meets two of the fundamental criteria I have set out: it is fully paid for and will reduce the deficit in the long term."

A previous version of the House bill carried an estimated cost of $1.04 trillion over 10 years, but House negotiators were able to lower the price tag -- in part by expanding Medicaid coverage to a broader slice of the population, the equivalent of all individuals who earn about $16,200 per year. The original House legislation had sought an increase to 133 percent of the federal poverty level, or about $14,400 per year, the same level proposed in the Senate bill.

The adjustment reflects findings by congressional budget analysts that covering the poor through Medicaid -- which pays providers far less than Medicare -- is much more cost-effective than offering subsidies for private insurance policies, something the bill would provide to middle-class individuals who lack access to affordable coverage through their employers.

The main revenue sources in the House bill include a surcharge on wealthy taxpayers and changes to Medicaid and Medicare worth about $500 billion in cost savings over 10 years, according to the nonpartisan Congressional Budget Office.

Under the House bill, 36 million Americans who are currently uninsured would become eligible for coverage, either through Medicaid or private insurance purchased on a new national exchange. Most individuals would be required to purchase insurance, and subsidies would be available to middle-class families to help offset the cost. The legislation would require employers to provide health coverage to their workers or face a penalty, although firms with annual payrolls below $500,000 would be exempt.

The insurance industry would face new coverage restrictions, including a ban on turning people away due to preexisting conditions. The legislation would end a federal antitrust exemption that has protected the industry for decades from investigations into price-fixing and other business practices, and it would institute a review process into premium increases. Addressing a significant slice of the uninsured population, the bill also would require health plans to allow young adults to remain on their parents' insurance policies until their 27th birthdays.

The House bill also would create a voluntary long-term care insurance program to be financed through payroll deductions, a provision that addresses a major source of health-care spending but also provides short-term budget benefits. The Community Living Services and Support Act, or CLASS Act, would require beneficiaries to pay a premium in exchange for cash benefits to cover the cost of home care, adult day programs, assisted living or nursing homes, after they had been enrolled for at least five years.

The proposal has gained momentum in recent days as Democrats in both the House and Senate look for new revenue sources to finance their reform ambitions. Because the program would begin taking in premiums immediately but would not start paying benefits until 2016, congressional budget analysts have forecast that including the CLASS Act in the House bill would reduce the deficit by an additional $73 billion, for a total 10-year reduction of $103 billion, compared to a $30 billion reduction if the program is not included in the legislation.

Before the bill's official unveiling, House Democrats gathered in the basement of the Capitol to get a final briefing on the legislation from their leaders. Though many members cautioned that they would need to read through the bill before making a final decision, there were indications that holdouts on both the right and left were moving closer to casting "aye" votes.

Rep. Earl Pomeroy (D-N.D.), a prominent fiscal hawk, stood up at the party meeting and announced that he would support the measure, drawing a round of applause loud enough that it was audible outside the room. Rep. Heath Shuler (D-N.C.), one of the most conservative members of the caucus, did not go that far but suggested to reporters that he was more open to backing the bill than he ever had been before.

Rep. Gerald E. Connolly (D), who represents the Northern Virginia suburbs, said he was leaning toward voting for the measure after the bill's threshold for a surtax on the wealthy was raised to $500,000 for individuals and $1 million for married couples. Connolly and some other lawmakers from affluent districts feared that earlier versions of the bill would subject too many of their constituents to the tax.

"I'm very pleased about that," Connolly said. "That was a change that I fought very hard to make."

Liberals, meanwhile, emphasized that they had given up their favored version of the public option in order to move the ball forward. They said they hoped conservatives would make similar concessions.

"There's some sense that many of us on the left have compromised a great deal," said Rep. Anthony Weiner (D-N.Y.).

He added that liberals would be heartened if the White House came out forcefully in favor of key provisions in the House bill. "I would hope that the president of the United States would finally put his finger on the presidential scale here," Weiner said.

www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102901841_pf.html