The health-system overhaul proposed by Sen. Max Baucus would create millions of new insurance customers without subjecting health insurers to government-run competition -- two key victories for the much-maligned industry.

But insurers will come out on top only if a requirement that all Americans carry health insurance has teeth. Insurers have argued that the so-called individual mandate is essential to get healthy people paying premiums and balancing out the costs of adding coverage from an influx of sick people.

Deliberations...