WASHINGTON - Democratic U.S. Senator Max Baucus unveils a long-awaited healthcare overhaul on Wednesday that would dramatically revamp insurance rules but does not include a government-run option backed by liberal Democrats.

Baucus, chairman of the Senate Finance Committee, will make the bill public after months of negotiations that alienated some Democrats and attracted no Republican supporters.

Many elements of the plan were released last week and closely mirror President Barack Obama's proposals to overhaul the $2.5 trillion U.S. healthcare system, his top domestic priority.

The Baucus proposal will not include a government-run public insurance option but calls for the creation of non-profit cooperatives to create competition in the insurance market and reduce costs.

The plan is expected to require all U.S. citizens and legal residents to obtain health insurance and provide subsidies on a sliding scale to help people purchase coverage.

Some 46 million Americans -- nearly a sixth of the population -- now have no health insurance.

Under the Baucus plan, insurance companies could no longer deny coverage to people with pre-existing conditions and would be barred from offering limited-benefit plans or placing lifetime limits on coverage.

The proposal also would create state-based exchanges where individuals and small businesses could shop for insurance.

CONGRESS AND PUBLIC DIVIDED

Opinion polls show Americans are split over Obama's plans.

A Washington Post-ABC News poll released this week showed 46 percent favor the reforms but 48 percent are opposed. A CNN/Opinion Research Corporation poll showed 51 percent in favor and 46 percent opposed.

Baucus led months of talks among the so-called Gang of Six negotiators -- three Democrats and three Republicans -- in hopes of winning Republican support.

But none of the three Republicans -- Charles Grassley, Mike Enzi and Olympia Snowe -- has endorsed the proposals so far.

The panel, which will vote on the plan next week, will be the last of five congressional committees to take up a healthcare bill before each chamber votes on a final version.

Some Democrats have complained about the concessions made to Republicans, particularly reductions in the scope and elimination of the public option.

Critics of the option say it would hurt insurance companies and give government too big a role. Despite his support for a government-run insurance option, Obama has signaled it is not an essential element of any ultimate healthcare overhaul.
Senate Finance Committee member John Rockefeller, a Democrat and a strong backer of a public option, says he will not support the panel's healthcare bill without significant changes.

The bill is not expected to require employers to offer health insurance but companies with 50 or more full-time workers would pay a fee for employees who obtain policies subsidized by federal tax credits.

The proposal is expected to require that health insurance providers collectively pay an annual fee of $6 billion starting in 2010, with other health companies making smaller collective payments to help fund the reforms in the bill.

(Editing by John O'Callaghan)

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