Kennedy Details Vision for Health Care

Noting that firms have a "fiduciary responsibility" to shareholders, he said: "Why limit their profits and not the profits of the defense industry?"

At the same time, insurers would acquire millions of new clients, Mendelson said, pointing to the proposed expansion of the Medicaid program to 150 percent of the poverty level of $16,000 for an individual. That provision would create 20 million more insurance customers, according to Mendelson's modeling. The chief spokeswoman for the insurance industry declined to comment yesterday.

Kennedy spokesman Anthony Coley said aides would not discuss details while Democrats are "still actively engaged with Republicans in trying to find common ground."

As expected, the draft includes creation of a new government-sponsored insurance program that would pay doctors and hospitals Medicare rates, plus 10 percent. That could be good news for physicians, said Mendelson, since most reform plans aim to tighten doctor payments.

But Kahn said it might be problematic for hospitals, which are less likely to benefit as greatly from millions of newly insured who are younger and healthier.

Modeled after a Massachusetts reform implemented three years ago, the Kennedy approach would insist that everyone buy insurance, though subsidies would be given to people who could not afford it. The draft document suggests offering premium aid to people earning as much as 500 percent of the poverty level, or $110,000 for a family of four. That idea has Republicans outraged and fellow Democrats nervous about the cost.

Rep. Jim Cooper (D-Tenn.) said the draft by Kennedy aides and other ideas circulating among party leaders are unrealistically generous, while an employer mandate hurts workers and consumers.

"Congress just doesn't get it," he said.