Source: Key Senate Democrat dumps public option from health-care reform bill

WASHINGTON (CNN) - A proposed health-care bill sent by the powerful chairman of the Senate Finance Committee to key Senate negotiators Saturday night does not include a government-run insurance plan, a source close to the discussions told CNN Monday.

While the proposal excludes a so-called "public option," it would allow for the creation of non-profit health care cooperatives - an idea which some moderate Democrats and Republicans have expressed possible interest in supporting.

The bill would cost less than $900 billion over ten years, according to the source.

It 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 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.

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

–CNN's Ted Barrett and Dana Bash contributed to this report