WASHINGTON (AP) — Americans who refuse to buy affordable medical
coverage could be hit with fines of more than $1,000 under a health
care overhaul bill unveiled Thursday by key Senate Democrats looking to
fulfill President Barack Obamas top domestic priority.

The
Congressional Budget Office estimated the fines will raise around $36
billion over 10 years. Senate aides said the penalties would be modeled
on the approach taken by Massachusetts, which now imposes a fine of
about $1,000 a year on individuals who refuse to get coverage. Under
the federal legislation, families would pay higher penalties than
individuals.

In a revamped health care system envisioned by
lawmakers, people would be required to carry health insurance just like
motorists must get auto coverage now. The government would provide
subsidies for the poor and many middle-class families, but those who
still refuse to sign up would face penalties.

Called "shared
responsibility payments," the fines would be set at least at half the
cost of basic medical coverage, according to the legislation. The goal
is to nudge people to sign up for coverage when they are healthy, not
wait until they get sick.

In 2008, employer-provided coverage
averaged $12,680 a year for a family plan, and $4,704 for individual
coverage, according to the Kaiser Family Foundations annual survey.
Senate aides, who spoke on condition of anonymity because they were not
authorized to speak publicly, said the cost of the federal plan would
be lower but declined to provide specifics.

The legislation would exempt certain hardship cases from fines. The fines would be collected through the income tax system.

The
new proposals were released as Congress neared the end of a weeklong
July 4 break, with lawmakers expected to quickly take up health care
legislation when they return to Washington. With deepening divisions
along partisan and ideological lines, the complex legislation faces an
uncertain future.

Obama wants a bill this year that would provide
coverage to the nearly 50 million Americans who lack it and reduce
medical costs.

In a statement, Obama welcomed the legislation,
saying it "reflects many of the principles I’ve laid out, such as
reforms that will prohibit insurance companies from refusing coverage
for people with pre-existing conditions and the concept of insurance
exchanges where individuals can find affordable coverage if they lose
their jobs, move or get sick."

The Senate Health Education, Labor
and Pensions bill also calls for a government-run insurance option to
compete with private plans as well as a $750-per-worker annual fee on
larger companies that do not offer coverage to employees.

Sens.
Edward M. Kennedy, D-Mass., and Christopher Dodd, D-Conn., said in a
letter to colleagues that their revised plan would cost dramatically
less than an earlier, incomplete proposal, and help show the way toward
coverage for 97 percent of all Americans.

In a conference call
with reporters, Dodd said the revised bill had brought "historic reform
of health care" closer. He said the bills public option will bring
coverage and benefit decisions driven "not by what generates the
biggest profits, but by what works best for American families."

The
Congressional Budget Office, in an analysis released Thursday evening,
put the net cost of the proposal at $597 billion over 10 years, down
from $1 trillion two weeks ago. Coverage expansions worth $645 billion
would be partly offset by savings of $48 billion, the estimate said.

However,
the total cost of legislation will rise considerably once provisions
are added to subsidize health insurance for the poor through Medicaid.
Those additions, needed to ensure coverage for nearly all U.S.
residents, are being handled by a separate panel, the Senate Finance
Committee. Bipartisan talks on the Finance panel aim to hold the
overall price tag to $1 trillion.

The Health Committee could
complete its portion of the bill as soon as next week, and the presence
of a government health insurance option virtually assures a party-line
vote.

In the Senate, the Finance Committee version of the bill is
unlikely to include a government-run insurance option. Bipartisan
negotiations are centered on a proposal for a nonprofit insurance
cooperative as a competitor to private companies.

Three
committees are collaborating in the House on legislation expected to
come to a vote by the end of July. That measure is certain to include a
government-run insurance option.

At their heart, all the bills
would require insurance companies to sell coverage to any applicant,
without charging higher premiums for pre-existing medical conditions.
The poor and some middle-class families would qualify for government
subsidies to help with the cost of coverage. The governments costs
would be covered by a combination of higher taxes and cuts in projected
Medicare and Medicaid spending.