Reid Says Senate's Health Care Overhaul Will Have Public Option

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On Monday, Senate Majority Leader Harry Reid (D-Nev.) announced that the Senate's final health reform bill will include a federal public health insurance plan option that would allow states to opt out, the Washington Post reports (Murray/Montgomery, Washington Post, 10/27).

The proposed national plan would take effect in 2013, when other major provisions of health reform legislation are implemented (Pear/Herszenhorn, New York Times, 10/27). By 2014, states would have to decide if they want to participate in the public plan, according to the Wall Street Journal (Hitt/Adamy, Wall Street Journal, 10/27).

Reid, who began promoting the opt-out plan last week, said at a press briefing, "A public option can achieve the goal of bringing meaningful reform to our broken system and will protect consumers, keep insurers honest and ensure competition, and that's why we intend to include it in the bill that will be submitted to the Senate" (Young, The Hill, 10/26).

Reid acknowledged, however, that "[w]hile a public option is not a silver bullet, I believe it is an important way to ensure competition and level the playing field for patients with the insurance industry," adding, "Under this concept, states will be able to decide what works for them" (Levey, Los Angeles Times, 10/26).

According to the Post, Reid's announcement marks a major change from his position on the public option from about two weeks ago, when he seemed to distance himself from the plan to avoid losing the support of Senate moderates (Washington Post, 10/27).

The decision also culminates weeks of negotiations involving Reid, top White House officials and key Senate Democratic leaders to merge the chamber's two competing health reform bills from the Senate's Finance (S 1796) and Health, Education, Labor and Pensions (S 1679) committees (The Hill, 10/26).

The HELP Committee bill includes a federal public plan.

The Finance Committee in September rejected a pair of amendments that would have added to its bill one of the proposed variations of the public option. Instead, the committee passed its bill with a provision to create a network of not-for-profit health cooperatives.

Although proponents of the co-ops believe they will offer savings, the Congressional Budget Office has not found any savings benefits (New York Times, 10/27).

Jim Manley, a spokesperson for Reid, said that the new Senate bill has been sent to the CBO for a full cost analysis. He declined to provide further details of the bill, suggesting that the legislative language could be revised after it has been analyzed by CBO.

Manley said that Reid would make final decisions on the bill's components after the new cost scores have been issued, possibly within one week. He said, "When we have a final bill, everyone will have an opportunity to see and read what's in it" (Washington Post, 10/27).

Key Democrats, White House Welcome Reid's Decision

On Monday, Senate Finance Committee Chair Max Baucus (D-Mont.) said that he "supports[s] any provision, including a public option, that will ensure choice and competition and get the 60 votes needed to pass the Senate."

Sen. Christopher Dodd (D-Conn.), who shepherded the HELP Committee bill through its markup, said, "Majority Leader Reid has made a bold and right choice."

Senate Democratic Conference Vice Chair Charles Schumer (N.Y.), a proponent of the state opt-out plan, noted, "This form of public option is not exactly what either liberals or moderates would want," adding, "But a public plan based on a level playing field, with an opt-out for states, is the best compromise that has the potential of getting 60 votes in the Senate" (The Hill, 10/26).

White House press secretary Robert Gibbs said that President Obama was "pleased" with Reid's decision, adding in a statement, "As he said to Congress and the nation in September, he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition" (Hunter/Armstrong, CQ Today, 10/26).

Sen. Jay Rockefeller (D-W.Va.) -- chair of the Senate Finance Subcommittee on Health Care and a vocal proponent of a public option -- offered his support for Reid's bill.

Rockefeller said, "An opt-out clause would protect the public option, and would help secure the necessary votes to pass health care reform, without compromising on the type of coverage or level of affordability" (Armstrong/Hunter, CQ Today, 10/26). He added, "This will still save money and provide a real public option for people, and I am glad Leader Reid is moving forward with this strong health care reform agenda" (Haberkorn, Washington Times, 10/27).

Snowe 'Disappointed'

The New York Times reports that Reid appears to have lost the sole Republican vote that Democrats counted on for "a tinge of bipartisanship."

Sen. Olympia Snowe (R-Maine) -- who voted to approve the Finance Committee bill, making her the only Republican in either chamber of Congress to vote for any health reform bill -- said she was "deeply disappointed" with Reid's decision (New York Times, 10/27).

In a statement following Reid's announcement, Snowe continued to tout a "trigger" option, a compromise plan she introduced that would launch a public plan in states where private insurers fail to provide affordable coverage (Los Angeles Times, 10/26).

She said, "I still believe that a fallback, safety-net plan, to be triggered and available immediately in states where insurance companies fail to offer plans that meet the standards of affordability, could have been the road toward achieving a broader bipartisan consensus in the Senate" (New York Times, 10/27).

Reid said Monday that he will not submit Snowe's trigger option or any of the other proposed compromise plans to CBO for a cost review, noting that he is hopeful for some Republican support -- primarily from Snowe and Sen. Susan Collins (R-Maine) (The Hill, 10/26).

Republicans Reject Plan

Meanwhile, other Senate Republicans -- who have long been critical of a public option -- "swiftly condemned" Reid's decision, the Wall Street Journal reports, adding that they plan to band together to reject cloture on the final Senate bill (Wall Street Journal, 10/27).

Senate Minority Whip Jon Kyl (R-Ariz.) said that Reid's opt-out plan eventually would lead to a government-administered health plan similar to the public option that many liberal Democrats have long advocated.

Kyl said, "I know how hard states try to get Medicaid waivers, and it's really hard," citing the HHS-approved waivers that states receive to expand Medicaid. "So are you going to feel really good if your state has the ability to opt out if the secretary's going to be the one who gets to decide that, and she's very much for government-run insurance?" he asked (CQ Today, 10/26).

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