WASHINGTON - The U.S. Senate Finance Committee on Friday wrapped up debate on a massive overhaul of the U.S. healthcare system and prepared to vote on the legislation next week.

We can be proud of what we've done here, Committee Chairman Max Baucus said as the panel completed the amendment process and set a vote for next week. The panel is awaiting an official cost estimate on the roughly $900 billion measure before advancing the measure to the full Senate.

The bill calls for sweeping insurance market reforms and seeks to rein in soaring medical costs and expand coverage to millions of uninsured people.

U.S. President Barack Obama praised the panel's work.

We are now closer than ever before to finally passing reform that will offer security to those who have coverage and affordable insurance to those who don't, he said in a statement.

In its seventh day of debate, the committee moved to try to make the medical coverage people will be required to purchase more affordable. It also changed the proposed tax on high-cost insurance policies to provide for more generous plans for retirees and workers in high-risk professions before the tax kicks in.

DEALS FOR LOW INCOME EARNERS

The bill would impose a 40 percent excise tax on insurance plans in excess of $8,000 for individuals and $21,000 for families. An amendment approved on a 13-10 party line vote raises those levels for retirees and high-risk professions, such as coal miners, to $9,850 and $26,000 respectively.

The panel also voted 12 to 11 mostly along party lines in favor of a proposal by Democratic Senator Maria Cantwell that would allow states to negotiate deals with healthcare plans for those on low incomes.

We are going to do everything we can to drive down the cost of insurance ... at least this amendment is a start, Cantwell said.

Healthcare reform is Obama's top domestic priority and the Senate Finance Committee is the last of five congressional committees to complete its work on the overhaul. The bill will be merged with one approved earlier by the Senate Health, Education, Labor and Pensions Committee before it is taken to the full Senate in mid-October.

The panel also voted 14-8 for an amendment offered by Democrat Blanche Lincoln that would set a $500,000 limit on the amount of executive pay that health insurance companies can deduct from taxable income.

The panel voted 22-1 for an amendment by Democratic Senator Charles Schumer and Republican Olympia Snowe that would exempt more lower income people from the requirement to purchase insurance and delay implementation of penalties for failure to purchase insurance.

The Baucus bill would have allowed hardship waivers only if the cost of insurance exceeded 10 percent of a person's income. The amendment lowered that threshold to 8 percent.

PENALTIES DELAYED

The amendment would also delay imposition of penalties on people who fail to purchase insurance. As a result, there would be no penalties for anyone who failed to purchase in 2013, while after that penalties would be phased in by increments of $200 a year, Snowe said.

The bill eventually would impose a maximum tax penalty of $950 for individuals and $1,900 for families that fail to purchase insurance.

Snowe, who holds a crucial Republican swing vote for the healthcare overhaul, argued against penalties until lawmakers are sure affordable health coverage is available.

Let's make sure this system works for the average American, she said.

The proposal would create state-based exchanges where individuals without employer-sponsored coverage and small businesses could shop for insurance. But the exchanges would not include a government-run plan or public option backed by many Democrats.

Instead, the committee's bill would create nonprofit insurance cooperatives to create competition.

The Cantwell amendment accepted by the committee would allow states to voluntarily negotiate with healthcare plans to provide coverage to people with incomes lower than twice the poverty level, about $44,000 for a family of four, but who are not eligible for the Medicaid health program for the poor.

It is a public plan, but negotiated with the private sector, Cantwell said, adding that federal money would be provided to states that tried the program.

(Editing by Eric Walsh)

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