WASHINGTON (CNN) -- A proposed health-care compromise by the powerful chairman of the Senate Finance Committee lacks a government-run insurance option favored by Democrats and would tax the most expensive health insurance plans, a source close to the discussions told CNN Monday.



Sen. Max Baucus, D-Montana, is the powerful chairman of the Senate Finance Committee.



As expected, the proposal from Sen. Max Baucus, D-Montana, excludes the public insurance option to compete with private insurers. However, it would allow for the creation of nonprofit health care cooperatives -- an idea that some moderate Democrats and Republicans have expressed possible interest in supporting.



The potential compromise proposal was sent to key Finance Committee negotiators Saturday night. It is considered a last-ditch effort to secure Republican votes for a health-care bill as President Obama pushes the issue with a planned speech to a joint session of Congress on Wednesday night.



So far, none of the three Republican senators involved in talks with Baucus on the compromise have indicated whether they support the version he is proposing.



Congressional liberals are pushing strongly for inclusion of a public option; conservatives are sharply opposed. Obama has said he supports a public option but has not clearly indicated he will veto a bill that fails to include it.



On Monday, Obama reiterated his support for a public option in a Labor Day speech to a union gathering in Cincinnati. He outlined Democratic health-care proposals that include a public option as part of a menu of insurance choices, including private health-care plans, that the legislation would create.



"I continue to believe that a public option within that basket of insurance choices would help improve quality and bring down costs," Obama said to loud cheers.



The president also indicated he would push hard for the House and Senate to move forward on passing health-care legislation in his upcoming address to Congress.



"The Congress and the country have been engaged in a vigorous debate for many months," Obama said. "And the debate has been good, and that's important because we have to get this right.



"But every debate at some point comes to an end," he continued, to growing applause. "At some point, it's time to decide. At some point, it's time to act. And Ohio, it's time to act to get this done."



Baucus' bill would cost less than $900 billion over 10 years, according to the source who spoke to CNN. The price tag is at least $100 billion less than any other health-care reform bill under consideration by Congress, the source said.



As with other reform proposals, the bill would bar insurance companies from dropping a policyholder in the event of illness as long as that person has paid his or her premium in full. It adds new protections for people with pre-existing conditions and establishes tax credits to help low and middle-income families purchase insurance coverage, the source noted.



It creates health insurance exchanges to make it easier for small groups and individuals to buy insurance.



The bill would be paid for, in part, by a new tax on health insurance companies that provide high-end "Cadillac" insurance plans, the source added.



Supporters of such a tax -- initially proposed by Massachusetts Sen. John Kerry and other Democrats several weeks ago -- say will it help curb the cost of health care by discouraging employers from offering such plans. They also argue that consumers, in turn, will be discouraged from overusing the health care system.  Watch senators discuss health care talks »



Critics claim the new tax will cause insurance companies to raise rates on all of their customers, even those without more expensive plans.



The so-called "Gang of Six" Senate negotiators -- a group of three Democrats and three Republicans on the Finance Committee -- is scheduled to meet Tuesday to discuss the proposal.



The source, while stressing that the proposed bill is not a final product, said it closely reflects the group's work and areas of agreement.



Obama's planned speech to
Who's proposal to negotiators would allow nonprofit cooperatives instead? what is favored by some Democrats? Where would the funding come from? where would some funding come from? how much would the bill cost? How much would the bill cost over 10 years? Where would some of the funding come from?
Sen. Max Baucus, government-run insurance option new tax on health insurance companies new tax on health insurance companies less than $900 billion over 10 years, less than $900 billion new tax on health insurance companies
question: Who's proposal to negotiators would allow nonprofit cooperatives instead?, answer: Sen. Max Baucus, | question: what is favored by some Democrats?, answer: government-run insurance option | question: Where would the funding come from?, answer: new tax on health insurance companies | question: where would some funding come from?, answer: new tax on health insurance companies | question: how much would the bill cost?, answer: less than $900 billion over 10 years, | question: How much would the bill cost over 10 years?, answer: less than $900 billion | question: Where would some of the funding come from?, answer: new tax on health insurance companies