Public Option Allowing States To Opt Out Gains Ground In Congress

October 23, 2009 1:21 p.m. EST

Washington, D.C. (AHN) - A form of government insurance plan that lets states opt out is being pushed by Senate Democratic leaders and may be part of the bill that goes to the chamber's full floor for debate. Senate Majority Leader Harry Reid (D-NV) is currently working to merge two healthcare reform proposals amid pressure from liberals to include a strong public option.

The Senate Health panel in June reported out a $600 billion measure that has a "robust" government plan, while the Finance Committee last week approved an $829 billion bill that has non-profit insurance cooperatives instead of a public alternative.

A public option is a government-run, voluntary program that would compete with private insurance by offering cheaper coverage. Democrats support it because according to them it would help make the costs overhauling the nation's healthcare system and expanding coverage to the 47 million uninsured more affordable. The GOP says it would cause more job losses, harm small businesses, and would not reduce costs nor provide insurers with fair competition.

The White House has repeatedly said that it is not a requirement in the final reform legislation, so long as this also offers choice and competition to for-profit insurance. The administration is aiming for a bill costing $900 billion over 10 years, and that has a limited public option covering less than five percent of Americans.

Apart from the two Senate measures, three bills in the House that include a government plan are awaiting scores from the Congressional Budget Office (CBO), a non-partisan agency, before they are incorporated into one measure.

Passage of a public option is more critical in the Senate, where the majority is much more fragile and where Democrats such as Sen. Blanche Lincoln (D-AR) and centrist Republicans such as Sen. Olympia Snowe (R-ME) oppose it. Sen. Kent Conrad (D-ND), who crafted the Finance panel's proposal for non-profit cooperatives, has also repeatedly said a government-run program has no hope of passing in his chamber.

But there is apparent momentum for a limited public option that lets states decide if they want to participate in a national program. The idea has been proposed by Sen. Chuck Schumer (D-NY), the third ranking Democrat, and is said to have the support of Reid.

Snowe has said she does not support the opt-out type of public option. The only Republican to vote for a Democratic reform proposal and one of only three from the GOP who voted to pass the President's stimulus bill, Snowe is the progenitor of the plan that would only be triggered if insurers in a state are unable to meet certain requirement on affordability -- the so-called "trigger" public option -- that failed to gain support from either Democrats or Republicans.

The White House has refused to say if it favors the proposal. The administration "has been involved in meetings that normally happen in the evening as the two committees look to merge their legislation in a process that's being led by Senator Reid, " and will "continue to evaluate proposals as they come down the pike that are involved in the merged legislation as we go forward," Press Secretary Robert Gibbs said late Thursday, only hours before Reid and other Senate Democrats met behind closed doors with the President for an update on healthcare.

Republicans have decried the private negotiations and said the first major vote on healthcare -- Wednesday's defeat of a majority bill to fix the Medicare payment formula -- forewarns of the future of the final reform bill.

"They are writing the health care bill in secret, even though the President called for all of this to be out on an open table and have C-SPAN cameras in the room," said House Minority Leader John Boehner (R-OH).

"At the moment, the final details of the Democrat health care plan are largely unknown to the American people," Senate Minority Leader Mitch McConnell (R-KY) issued from the floor. "That's because those details are being worked out in private by a handful of senior Democrats and White House officials. But we do know the basics. It will cost about a trillion dollars, it will raise insurance premiums and taxes, and it will slash Medicare for seniors by about a half a trillion dollars over the next ten years. This much we know."

The emerging support for a limited public option comes as an ABC News/Washington Post poll finds that 57 percent of Americans now back a government plan, and 76 percent support a public option if this is run by states and is offered only to people without access to affordable private insurance.

The survey also found that virtually half of all Americans, 51 percent, prefer legislation that includes some form of public option for those without affordable access, even if the measure does not have the support of Republicans.

In the House, the issue on the public option has been whether to base its payment rates on Medicare provider payments. House Progressives, who make up the largest caucus in Congress, have been warning that negotiated payment rates would "weaken" a government program.

The bill reported out by the chamber's Energy Committee allows doctors to negotiate payment rates and costs $900 billion, while the two bills from the Ways and Means and Education Committees each costing $1 trillion over 10 years do not.