Provisions in Baucus' bill also would set up a series of initiatives to make Medicare more efficient, including incentives for hospitals to reduce readmissions and for doctors to do more to coordinate their patients' care.
And in a bid to satisfy the business community, Baucus significantly weakened requirements on employers to provide insurance.
Whereas the House bill threatened businesses with annual payrolls above $750,000 with a penalty of as much as 8% of their payroll if they did not provide insurance, Baucus capped any penalty to $400 per worker for businesses with more than 50 employees.
Baucus' bill also places no requirement on businesses to pay a minimum percentage of the cost of their workers' premiums. The House bill requires employers to pay 72.5% of the insurance premium for workers with individual policies and 65% for workers with families.
To help pay for his bill, Baucus has proposed a series of excise tax on insurance plans worth more than $8,000 for singles and $21,000 for families, and new fees on insurers, drug makers, device makers and clinical labs.
In contrast, House Democrats' healthcare legislation relies heavily on a surtax on high-income taxpayers.
The completion of Baucus' bill marks the end of one phase of a healthcare debate in which senior Democrats developed three proposals -- one in the House and two in the Senate. Now, Democratic leaders on Capitol Hill will work to unify their party behind a final bill that could pass Congress and make it to President Obama's desk.
"We worked to build a balanced, common-sense package that ensures quality, affordable coverage and doesn't add a dime to the deficit," the Montana senator said. "Now we can finally pass legislation that will rein in healthcare costs and deliver quality, affordable care to the American people."
In the White House, reaction to the plan was low-key. Press Secretary Robert Gibbs called it "an important building block" that gets the country closer to a comprehensive healthcare overhaul.
Still, Obama did his part to keep peace in the Democratic family: He met with Sen. John D. Rockefeller IV (D-W.Va.), a senior member of the finance committee who has complained that the White House seemed to be willing to make any concession to get some kind of bill passed.
After the meeting, Rockefeller said he was convinced of Obama's commitment to a strong bill, but reiterated his view that he could not support Baucus' proposal without major changes.