Sen. Max Baucus, D-Mont., the committee chairman and principal architect of the measure, hailed the budget report.
"This legislation, I believe, is a smart investment on our federal balance sheet. It's an even smarter investment for American families, businesses and our economy," he said on the Senate floor.
The committee Baucus chairs is the fifth and last of the congressional panels to debate health care. The Senate Finance version has a decided middle-of-the-road flavor, shunning any provision for the government to sell insurance in competition with private industry. Nor does it require businesses to offer coverage to their workers, although large firms that do not would be required to offset the cost of any government subsidies going to those employees.
The measure would require that millions of Americans purchase private insurance for the first time, and would set up a new marketplace where policies would be available.
Federal subsidies would be available to millions of lower-income individuals and families to help defray the cost of coverage that would otherwise be out of their reach. The alternative to government-sold health care, a proposal for nonprofit co-ops that would compete with private companies, was judged largely ineffective by budget officials. Such arrangements "seem unlikely to establish a significant medical presence in many areas of the country," they wrote.
The legislation also would ban current insurance industry practices that deny coverage on the basis of pre-existing medical conditions, and restrict companies' ability to charge vastly higher premiums on the basis of age, gender or other factors.
The measure would be paid for through a variety of tax increases and spending cuts, including savings of hundreds of billions of dollars from Medicare, the federal health care program for seniors.
Democratic leaders in both houses are hoping to hold votes on health care on the floor of the House and Senate within a few weeks.
Anticipating approval by the Finance Committee this week, Majority Leader Harry Reid is already overseeing efforts to merge that bill with an alternative approved by the Senate Committee on Health, Education, Labor and Pensions.
Reid is subject to intense cross-pressures, not only from the members of the two committees, but also from the Obama administration and rank-and-file senators seeking to mold the legislation to their liking.
Reid also must take into account the likely need to amass 60 votes behind any legislation, the majority needed to overcome any Republican filibuster.
Baucus has expressed confidence he has the votes for his measure inside the Finance Committee, and the major lingering question there is whether Sen. Olympia Snowe, R-Maine, will break ranks with fellow Republicans and vote for it. She has been steadily noncommittal in public statements, but is under pressure from her own party to oppose the legislation.
Wednesday's report to Baucus from CBO's director, Dr. Douglas Elmendorf, stressed that the estimates were preliminary.