Senate may drop public option
Reid says he is optimistic about bill after deal

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Wednesday, December 9, 2009

Democratic Senate negotiators struck a tentative agreement Tuesday night to drop the controversial government-run insurance plan from their overhaul of the health-care system, hoping to remove a last major roadblock preventing the bill from moving to a final vote in the chamber.

Under the deal, the government plan preferred by liberals would be replaced with a program that would create several national insurance policies administered by private companies but negotiated by the Office of Personnel Management, which oversees health policies for federal workers. If private firms were unable to deliver acceptable national policies, a government plan would be created.

In addition, people as young as 55 would be permitted to buy into Medicare, the popular federal health program for retirees. And private insurance companies would face stringent new regulations, including a requirement that they spend at least 90 cents of every dollar they collect in premiums on medical services for their customers.

The announcement came after six days of negotiations among 10 Democrats -- five liberals and five moderates -- appointed by Senate Majority Leader Harry M. Reid (D-Nev.) to work out differences between the two camps on the public option and other pressing issues. Appearing in the Capitol with Sen. Charles E. Schumer (D-N.Y.), the leader of the liberal faction, and Sen. Mark Pryor (D-Ark.), representing moderates, Reid hailed the deal as a broad agreement that has the potential to "overcome a real problem that we had" and push the measure to final Senate vote before Christmas.

"Not everyone is going to agree with every piece," Reid said. But when asked whether the deal means the end is in sight after nearly a year of work on President Obama's most important domestic initiative, he smiled. "The answer's yes," he said.

According to a Democrat briefed on the talks, the deal represents only an agreement among the 10 negotiators to send the new package to congressional budget analysts, not an agreement to support its elements. One of the negotiators, Sen. Russell Feingold (D-Wis.), quickly issued a statement criticizing the deal.

"While I appreciate the willingness of all parties to engage in good-faith discussions, I do not support proposals that would replace the public option in the bill with a purely private approach," he said. He added, however, that he will base his vote "on the entirety of what is in the bill, and whether I think the bill is good for Wisconsin."

Democrats must also win the approval of several key lawmakers who have not been involved in the talks, including Sens. Joseph I. Lieberman (I-Conn.) and Olympia J. Snowe (Maine), the only Republican who has voted in favor of the Democratic health initiative. If the Senate approves the agreement, it will face a huge obstacle in the House, where Speaker Nancy Pelosi (D-Calif.) has fought hard to preserve a public plan in the face of opposition from House moderates.

If the deal holds, it will represent a major breakthrough on one of the most contentious issues of the health-care debate, settling a dispute between moderates wary of excessive government intrusion into the private sector and liberals determined to create a strong competitor able to curb the most egregious abuses in the private insurance industry.

"It may be different from what was previously included in the bill," said Reid spokesman Jim Manley, "but it accomplishes the same goals as a so-called public option."

Abortion issue

Earlier in the day, the Senate turned back an amendment that would have barred millions of Americans from purchasing subsidized insurance policies that cover abortion, as Democratic leaders struggled to maintain a delicate party coalition. The amendment was rejected 54 to 45. Although the outcome of the vote was not a surprise, the defeat could cost Reid the support of Sen. Ben Nelson (Neb.), a conservative Democrat who has threatened to join a GOP filibuster of the bill unless abortion restrictions are tightened.

Nelson is one of five moderates in the Democratic caucus demanding changes to the legislation, forcing Reid to balance their concerns with those of liberals as he seeks to maintain the 60 votes needed to push a bill across the finish line. The biggest challenge has been determining the fate of the public option, a chief priority for progressive Democrats.

Key liberals said they were prepared to abandon a government-run insurance program if it would move the chamber closer to a final deal, provided it was replaced with other coverage options and tighter restrictions on insurance companies. "I don't think we're going to get that right now," Sen. John D. Rockefeller IV (D-W.Va.) said of the public option. "So we're going for as strong a regulation guidance as we possibly can."

Democrats made a different calculation on abortion. Although the House voted Nov. 7 to bar their public plan from offering abortion coverage and to prohibit people from using federal subsidies to purchase private policies that cover elective abortion, Senate Democrats rejected Nelson's measure, despite the potential threat to final passage. Six Democrats joined all but two Republicans to support the tighter rules, but some Democratic abortion opponents -- including Reid -- opposed the amendment as too far-reaching.

In a speech on the Senate floor, Reid said the current Senate language, which would allow individuals who qualify for insurance subsidies to purchase abortion coverage with their own money, represented "a fair middle ground."

He told reporters that he will seek other avenues in attempting to allay Nelson's concerns, but added, "This is not the right place for this debate. We have to get on with the larger issue at hand." After the vote, Nelson said he will not rule out supporting the final Senate measure. "Let's see what develops. One thing I've found is that the future sometimes can surprise you," he said.

Nearing the finish line

A series of pending amendments, including several popular measures, must be resolved before Reid can end debate on the bill and call a final vote. On Wednesday, the Senate is expected to consider a bipartisan effort to allow cheaper prescription drugs to be imported from Canada and other countries. And a group of Senate Democratic freshmen is pushing a package of cost-control provisions, including an expansion of an independent Medicare advisory board that would allow it to recommend changes to the entire health-care system.

Despite the full slate, Reid said he is optimistic. "Every day that we work on these amendments and do the negotiations we're doing," he told reporters, "the closer we get to the finish line."

After the vote, Nelson returned to the talks about the public option. In addition to the ideas accepted late Tuesday, the group had been discussing an additional expansion of Medicaid eligibility, an idea that many moderates dismissed as too expensive. Many also have doubts about letting younger people who do not have access to coverage through an employer buy into Medicare.

By some estimates, that idea could add as many as 3 million people to the financially struggling program. The Congressional Budget Office has estimated that those individuals could face annual premiums of as much as $7,600. And because such a program could encourage people to retire earlier than they might otherwise, a buy-in program could increase Social Security costs for the federal government.

Still, key senators, including Snowe, said they would be willing to discuss a Medicare buy-in program so long as states with particularly low Medicare reimbursement rates were compensated and a mechanism was adopted to ensure that Medicare would not suffer financially because of the expansion.

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