Reid set to move ahead on public insurance option; with state opt-out

A controversial public insurance option will be included in the Senate’s healthcare bill.

Senate Majority Leader Harry Reid (D-Nev.) revealed Monday that the Senate bill will include the public option, but with a clause that allows states to opt out of a government run program.

“I’ve conclude with the support of the White House and Sens. Dodd and Baucus, that the best way to move forward is to include a public option with the op-out provision for states,” Reid said at a press conference.

The opt-out provision is intended to attract centrist Democrats, but the presence of the public option could lead the only Republican to vote for a healthcare bill, Sen. Olympia Snowe (Maine), to drop her support.

Reid has been crafting a compromise bill with Sen. Chris Dodd (D-Conn.), who shepherded legislation through the Senate Health, Education, Labor and Pensions (HELP) Committee, and Senate Finance Committee Chairman Max Baucus (D-Mont.).

Reid, Baucus, Dodd and White House officials for weeks have tried to reconcile the two panel’s bills. Among other differences, the Dodd panel’s bill included a public option while the Finance Committee’s legislation did not.

“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,” Reid said Monday.

“While a public option is not a silver bullet, I believe it is an important way to ensure competition and the level the playing field for patients with the insurance industry,” he said.

The announcement of a decision on one of the most contentious issues in healthcare reform -- long-awaited but widely predicted in recent days -- moves the Senate one crucial step closer to acting on President Barack Obama’s signature domestic policy issue.

After building support within his caucus, Reid concluded that the best path to success on healthcare reform is to present the Senate with a public option from which states could choose to opt out.

Public option supporters such as HELP Committee Chairman Tom Harkin (D-Iowa) claim that the opt-out version has the support of as many as 58 of the 60 Democrats in Congress, which places Reid within striking distance of a filibuster-proof majority for the bill without any Republican support.

“I feel good about the consensus that was reached within our caucus with the White House,” he said, citing “unprecedented momentum” for healthcare reform and positive polling numbers for the public option. “My caucus believes strongly there should be healthcare reform.

But Reid’s calculation that the best way to unify Democrats on healthcare reform is to include a public option in the bill could undermine his and Obama’s oft-stated goal of attracting Republican support for the effort. Snowe, who voted for Baucus’s bill in committee, opposes the public option in the form presented by Reid.

“She does not like a public option of any kind,” said Reid, who said he spoke to Snowe about the issue Friday.

The absence of the support of a single Republican also could unnerve centrists such as Sens. Ben Nelson (D-Neb.) and Joseph Lieberman (I-Conn.).

“I’m always looking for Republicans,” Reid said. “It’s just a little hard to find them.”

Snowe had proposed establishing a “trigger’ under which the public option would activate in states underserved by private insurance. Most Democrats rejected this compromise, despite overtures from Obama to Snowe. Reid said he will not ask the Congressional Budget Office to analyze Snowe’s trigger proposal or any other public option alternative. “We hope that Olympia will come back,” Reid said.

Republicans immediately seized on Reid’s news, with GOP Senate Leader Mitch McConnell (Ky.) assailing a “thousand-page, trillion-dollar bill that raises premiums, raises taxes and slashes Medicare for our seniors to create new government spending programs.”

“That’s not reform. So, wholly aside from the debate over whether the government gets into the insurance business, the core of the proposal is a bill that the American public clearly does not like, and doesn’t support,” McConnell said in a statement.