Reid puts ‘public option’ in health reform again

Senate Majority Leader Harry Reid on Monday sought to assuage the left wing of his Democratic Party by deciding to include a government-run insurance plan in his health care reform bill, bypassing the lone Republican who supported the effort and ensuring a bruising political battle in pursuit of President Obama’s top legislative priority.

In an attempt to gain pivotal support from moderate Democrats, Mr. Reid also said the bill he sends to the Senate floor will allow states to “opt out” of the insurance plan, also known as a public option. But moderates withheld their backing, waiting to hear more details.

Sen. Olympia J. Snowe of Maine, the only Republican to vote for a Democratic reform bill in five congressional committees, said she was “deeply disappointed” with Mr. Reid’s decision and would not support the bill. She favored a plan to hang the threat of a public plan over private insurers to encourage them to lower costs, but not to include it in the initial health reform program.

Mr. Reid, of Nevada, offered few other specifics of his bill and declined to say whether he had the 60 votes required to overcome a Republican fillibuster.

He sent several versions of a reform bill to the Congressional Budget Office (CBO) for analysis to provide Democrats with options and to ensure he can keep under Mr. Obama’s price tag of $900 billion over 10 years. He declined to say how states could choose to leave the national plan and what criteria, if any, they would have to meet. The legislation is also expected to require all Americans to purchase insurance and impose stiff penalties if employers do not provide it.

But it’s the public option, which is also expected to be in the House bill, that has proven to be the most controversial part of Mr. Obama’s plans to overhaul the nation’s health care system.

“While the public option is not a silver bullet, I believe it’s an important way to ensure competition and to level the playing field for patients with the insurance industry,” Mr. Reid said Monday in announcing the merged bill, crafted from legislation provided by the Finance and the Health, Education, Labor and Pensions committees.

Republicans have drawn a line in the sand, promising to block any reform bill that includes the provision, which they say would lead to a government takeover of the health care system.

“While final details of this bill are still unknown, here’s what we do know: It will be a thousand-page, trillion-dollar bill that raises premiums, raises taxes and slashes Medicare for our seniors to create new government spending programs,” said Minority Leader Mitch McConnell of Kentucky. “That’s not reform.”

The loss of Mrs. Snowes support leaves Democrats to come up with all 60 Senate votes and all but eliminates Mr. Obama’s hopes for a bipartisan reform bill. While Democrats have 60 seats when two Democrat-leaning independents are included, moderates in the party are not yet convinced that the public option would control costs.

Sen. Joe Lieberman, Connecticut independent, has said he doesn’t support the public option, and Sen. Ben Nelson, Nebraska Democrat, said Sunday on CNN’s “State of the Union” that he’s “not excited” about the “opt-out” idea.

Sen. Mary L. Landrieu, Louisiana Democrat, said Monday that she’d withhold judgment until she sees the specifics of the bill and the cost estimate.

“While I remain very skeptical about a government-run national option, I want to continue to work to achieve a principled compromise that would drive down costs, increase choices and expand affordable coverage for more Americans,” she said.

Signaling the importance of gaining moderate support, the bill will also allow states to establish cooperatives, once envisioned in the Finance Committee as a compromise between public-option supporters and skeptics. The public plan will also operate under rates negotiated between the Department of Health and Human Services and providers, according to a senior Democratic aide. Rural-state lawmakers objected to any other payment system based on Medicare rates because they felt it favored wealthier, more populous states.

Liberal Democrats and advocacy groups praised the news, arguing that the public option is the only way to ensure there is a strong competitor to private insurance companies that now have monopolies in many markets.

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