The full Senate has begun debate on the Democratic leadership’s major health reform plan, the Patient Protection and Affordable Care Act (H.R. 3590). The measure cleared an important procedural hurdle November 21, 2009 when the Senate voted 60-39 in favor of proceeding to consideration of the bill, and the first votes on what is expected to be a long list of amendments took place December 3. The legislation reflects the Senate leadership’s attempts to balance differing measures previously adopted by the Senate Finance Committee and the Health, Education, Labor, and Pensions Committee. On the contentious issue of a public health plan, the leadership plan would establish a non-profit public plan dubbed the “community health insurance option” that would be available to individuals who purchase health insurance through a new insurance “exchange.”   Payment rates under the community health option would be based on negotiations with providers and suppliers, and states would be allowed to “opt out” of offering this option. The voluminous bill also would, among many other things: establish federal subsidies for individuals to reduce the cost of purchasing coverage; expand Medicaid eligibility; establish a mandate for most individuals to obtain health insurance and most large employers to contribute towards the cost of insurance; institute various insurance market reforms; substantially reduce the growth of Medicare payment rates for most services and tie certain payment rates to quality outcomes; establish an independent Medicare Advisory Board to recommend Medicare savings and quality improvement proposals, with the Board’s proposals taking effect automatically unless Congress approves alternative policies; establish requirements to promote transparency in financial relationships and reduce health care fraud and abuse; establish annual fees on the pharmaceutical manufacturing sector ($2.3 billion annually), the medical device manufacturing sector ($2.0 billion annually), and the health insurance sector ($6.7 billion annually); and make various other changes to the federal tax code, Medicare, Medicaid, and other programs. The Congressional Budget Office (CBO) estimates that the gross cost of the insurance coverage expansion would be $848 billion over 10 years, but that amount would be more than offset by a combination of other tax and spending changes that would result in a $130 billion net reduction in federal budget deficits over 10 years. The CBO also estimates that the legal nonelderly insured population would rise from about 83% currently to about 94% under the bill. Note that a lengthy Senate floor debate is expected, which could potentially extend beyond Christmas. Once the Senate approves its bill, the next step will be reconciliation with the House bill approved in November.