Republican governors: 'Opt out' unworkable

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By Ralph Z. Hallow

AUSTIN, Texas | Even with the "opt-out" option, Republican governors who gathered here last week weren't buying in to President Obama's plan to overhaul the nation's health care system.

While some GOP governors embraced Mr. Obama's $787 billion economic stimulus program earlier this year, the attendees at the annual meeting of the Republican Governors Association were standing unanimously with their congressional counterparts against the Democratic health care reform bills being considered in Congress.

A compromise devised by Senate Majority Leader Harry Reid, Nevada Democrat, to let states "opt out" of offering the government-financed "public" insurance option - among the most controversial parts of the overhaul plan - played to negative reviews here. Republican governors said the measure would put them in a political and policy bind.

"If they enacted the opt-out provision, but said you still have to pay the taxes on the public plan, it would be very difficult for any state to opt out of the plan," South Dakota Gov. Michael Rounds said in an interview.

"Unfortunately, if you as a state opt out, you will be taking away the ability of the folks in your state to get the benefits of the public plan, but they would still be paying the subsidy of the public plan," he added.

The House-passed version of health care reform - which received only one Republican vote - calls for a public insurance option and does not let individual states opt out. Mr. Reid's idea, criticized by some on the party's liberal wing, was designed in part to ease concerns of centrist Democrats in the Senate about the public option.

"Under this concept, states will be able to determine whether the public option works well for them and will have the ability to opt out if they so choose," he said when introducing his version of the bill earlier this month.

"I believe that a public option can achieve the goal of bringing meaningful reform to our broken system," he said.

Backers say the public option is needed to prod private insurers to lower costs and expand coverage. Opponents say the public plan, subsidized by taxpayer dollars, will have an unfair advantage in the marketplace and eventually lead to a government "takeover" of the nation's health insurance system.

Minnesota Gov. Tim Pawlenty, considered a likely candidate for the 2012 GOP presidential nomination, told The Washington Times that he doesn't like the public option because "it's bad policy."

Asked whether he would exercise the opt-out provision for his state if the bill becomes law, Mr. Pawlenty, who is RGA vice chairman, said, "We have to look at the bill. It's 2,000 pages and just came out [Wednesday] night. But I think having the government compete with the private economy is a bad idea."

Pressed about the public option, Mr. Pawlenty said, "Some earlier versions of the bill said that if you choose to opt out of getting the benefits, you still have to pay the money" in taxes to finance the plan.

"That's a terrible choice - or I should say terrible 'option,' " Mr. Pawlenty said. "If we have a reasonable chance to opt out of both the program and the benefits, we'd have to look at that."

Mr. Rounds warned that a public option "will create a death spiral, and the death spiral will involve more and more people moving to the public sector, with government required to pay a larger and larger percentage of the entire cost."

At a news conference in Austin, more than a dozen GOP governors, including RGA Chairman Haley Barbour of Mississippi, as well as Virginia Gov.-elect Robert F. McDonnell, expressed concerns about the overall health care bill and called on their Democratic counterparts to join them to fight what they said were "unfunded mandates" in the plan that would devastate already stressed state budgets.

Mr. Barbour estimated that the House-passed bill would mean $200 million more in costs for his state to cover higher Medicaid bills, and said other states faced similar tabs.

Said RGA Executive Director Nick Ayers, "Democratic governors and candidates have a decision to make: Will they stand with [House Speaker] Nancy Pelosi and Harry Reid, or will they stand with the taxpayers in their states?"