Washington - Senate Finance Committee Chairman Max Baucus unveiled on Wednesday an $856 billion plan to overhaul the nation's health care system that includes taxes on high-end insurance policies and incentives to create health care co-ops around the nation, but not the public option that President Barack Obama has sought.

    The Montana Democrat has been trying for months to create a bipartisan consensus on health care restructuring, but he finally grew frustrated and released his own blueprint. His committee, the last of five congressional panels to consider health care, is scheduled to write legislation starting next week.

    It will work from the 16-page outline that Baucus released Wednesday, which he called a "balanced, commonsense package that ensures quality, affordable coverage and doesn't add a dime to the deficit."

    Its highlight is the creation of co-ops. "These plans can operate at the state, regional or national level to serve as nonprofit, member-run health plans to compete in the reformed non-group and small group markets," Baucus' plan says.

    He'd spend $6 billion in federal money to get them started and meet solvency requirements.

    Supporters of co-ops maintain that negotiating rates collectively with hospitals, doctors and other providers would reduce costs. However, Obama and many lawmakers, particularly congressional Democrats, would prefer a government-run program that competes with the private sector.

    Baucus, however, has said - and most of his colleagues have agreed - that a "public option" couldn't pass the Senate.

    Baucus said he'd pay for his plan primarily by reducing Medicare costs - a proposal similar to those in other major bills in Congress - and by imposing a nondeductible excise tax of 35 percent on insurance companies and plan administrators for any health insurance plan that charges more than $8,000 for individuals and $21,000 for families.

    The tax would be imposed on the premiums above the threshold amounts. It would begin in 2013, and would be indexed for inflation.

    Independent analysts have questioned whether enough Medicare savings can be found to make up for the kind of price tag Baucus is discussing.

    His plan also would require insurers to cover everyone, regardless of health status. There would be "limited variation in premium rates" for tobacco use, age and family composition.

    Most people who don't carry health insurance would pay penalties for not obtaining coverage.

    Baucus aims to make buying it easier by creating health insurance exchanges, via Web portals that would show consumers all the available coverage within their ZIP codes. Advocates think that making it easier for consumers to compare policies would help lower prices.

    People wouldn't have to give up the insurance they now have, and plans would be able to continue offering the coverage that they do now to those who already have it.

    The health insurance market would see four categories for benefits: bronze, silver, gold and platinum.

    No policies could be issued that didn't comply with the requirements of at least one category. All policies would have to provide primary care and cover preventive services, emergency services, medical and surgical care, physician services, hospitalization, outpatient services, day surgery and related anesthesia, diagnostic imaging and screenings, maternity and newborn care, pediatric services, prescription drugs, radiation and chemotherapy, and mental health and substance abuse services.

    No lifetime limits could be set.