Prognosis improves for public insurance
MOMENTUM SHIFT IS DRAMATIC Top Democrats push option in health-care legislation

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writer
Saturday, October 24, 2009

Democratic leaders in the Senate and House have concluded that a government-run insurance plan is the cheapest way to expand health coverage, and they sought Friday to rally support for the idea, prospects for which have gone in a few short weeks from bleak to bright.

The shift in momentum is so dramatic that many lawmakers now predict that President Obama will sign a final bill that includes some form of government-sponsored insurance for people who do not receive coverage through the workplace. Even Democrats with strong reservations about expanding government's role in the health-care system say they are reconsidering the approach in hopes of making low-cost plans broadly available.

Senate Majority Leader Harry M. Reid (Nev.) and House Speaker Nancy Pelosi (Calif.) sought support Friday for expansive versions of the public option as they prepared to send reform legislation to the Senate and House floors. Their goal is to pass bills with similar versions of the public insurance option so that final talks between the two chambers can focus on other issues that could prove more difficult to resolve.

The public option emerged as a flash point in the reform debate at the outset, with liberals championing it as a precursor to a single-payer system and conservatives warning that it would lead to rationing. The rhetoric reached a fever pitch in hundreds of raucous town-hall meetings during the August congressional recess, leading Democrats -- including Obama -- to back off the idea for fear that it would sink overall reform legislation.

On Friday, congressional leaders marveled at how quickly the landscape has changed. "This is an exact quote: 'Off the table,' " House Majority Whip James E. Clyburn (S.C.) said, recalling the headlines earlier this month when the Senate Finance Committee rejected two versions of the public option in its reform bill.

Clyburn said the debate is no longer whether to include a public option, but "whether or not we will get this form of a public option or that form of a public option." Since the talk of "death panels" at town-hall meetings in August, Clyburn said, the political climate has changed as voters have come to understand "that all of this foolishness was just that -- foolishness. Nobody wants to pull the plug on Grandma."

Frustrating to some

The public-option debate is frustrating some Democrats, who have come to believe that a government-run plan is neither as radical as its conservative critics have portrayed, nor as important as its liberal supporters contend. Any public plan is likely to have a relatively narrow scope, as it would be offered only to people who don't have access to coverage through an employer.

The public option would effectively be just another insurance plan offered on the open market. It would likely be administered by a private insurance provider, charging premiums and copayments like any other policy. In an early estimate of the House bill, the Congressional Budget Office forecast that fewer than 12 million people would buy insurance through the government plan.

Sen. Mary Landrieu (La.), a moderate Democrat, said she still opposes a national plan financed by the federal government but would consider other permutations of a public plan, including a provision Reid is circulating to establish an "opt-out" clause for states that don't want to participate. "There is a way to compromise this, I believe," she said. "The goal is not public or private. The goal is choice and affordability."

Reid's strategy is to try to persuade his Democratic caucus to allow a health-care bill with an opt-out public plan to come to the floor, even if there is no guarantee that all 60 senators who caucus with Democrats would ultimately vote for it. All 40 Senate Republicans, including Sen. Olympia J. Snowe (Maine), who supported the Finance Committee bill, have pledged to block legislation that includes a government insurance plan. Reid must unite Democrats to break that filibuster.

"He's knows what he's doing is a gamble," Reid spokesman Jim Manley said. "But more and more, he's convinced it's the right thing to do."

Reid's calculation is that it could be more difficult to add a public option through amendments on the Senate floor than to include it in the bill and force opponents to try to find the votes to strip it out. Manley said Reid would spend the weekend canvassing Democrats on the opt-out idea and would probably decide Monday whether to include it in the Senate bill.

Noncommittal response

The Democratic leader pitched the opt-out idea to Obama at a White House meeting Thursday night and received a noncommittal response. Several senior Democratic sources said Obama is wary about alienating Snowe -- the only Republican so far to support a Democratic health-care measure -- and had already concluded that her plan for a "trigger" that would create a public option if private insurers don't offer affordable rates represented a satisfactory compromise.

Reid's original inclination was to leave the public option out of a final bill he is writing from measures passed by the finance and health committees. But his liberal colleagues began urging him two weeks ago to reconsider, after insurance industry forecasts that premiums would rise sharply under the Finance Committee bill, which lacked a public option. The report had the effect of prodding Democrats to look for better ways to control costs, and the public option -- strongly opposed by the insurance industry -- reemerged as a possible solution.

Because a government-run plan would be dedicated to holding down costs and would lack a profit motive, congressional budget analysts predict that it could reduce the cost of expanding coverage to people who don't have it by as much as $100 billion over the next decade.

In the House, Pelosi was still trying to line up votes for the most cost-effective version of the public plan, one that would pay providers based on Medicare rates. Rank-and-file House Democrats summoned Friday to an early-morning caucus were asked to say publicly whether they would vote for a bill that included such a provision.

Muddying the waters

Senior Democrats said it was still unclear whether that idea would prevail. While support for a "robust" public option is strong, they said, other issues are muddying the waters. For example, as many as 20 votes hinge on resolving a battle over abortion that has pitted an unyielding abortion-rights faction against antiabortion Democrats who want to make sure no federal money is used to pay for the procedure.

House leaders planned to work through the weekend to resolve as many individual concerns as possible, with the goal of producing a bill as soon as next week.

As part of that painstaking lobbying effort, Pelosi told reporters that she may have to resort to a version of the public plan that would allow providers to negotiate rates, presumably resulting in more generous payments. In the Senate, a plan that ties rates to Medicare is a nonstarter.

Both Pelosi and Clyburn said they would be open to the Senate's opt-out approach. "I don't think there's much problem with that," Pelosi said. Clyburn added: "All they're debating is whether or not to allow states to opt out of it, but you'll still have the same public option."

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