Speaker Pelosi set to stick with liberals on public health insurance option

House Speaker Nancy Pelosi is sticking with the liberal wing of her party on healthcare by choosing to go to the House floor with a public option based on Medicare, according to Democratic sources.

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These sources said Pelosi (D-Calif.) made it clear in a leadership meeting Tuesday night that she intends for the Medicare-based public option to be included in the final House bill.

But she acknowledged in a meeting of the full caucus later that she doesn”t yet have the 218 votes among Democrats that she needs to guarantee its passage.

“We are very close and I count tough,” Pelosi said, according to a senior Democratic staffer at the caucus. She added that passing a strong public option will give the House negotiating leverage in conference negotiations with the Senate.

She has asked House Majority Whip Jim Clyburn (D-S.C.) to have his operation survey all House Democrats starting Wednesday to see if they will support the Medicare-based option.

Democratic leaders are planning to roll out the bill next week, and are hoping to vote the first week in November.

The decision is likely to anger rural Democrats and centrists, including many Blue Dog Democrats. Many rural lawmakers believe Medicare already shortchanges the hospitals in their areas. They want government officials to negotiate individually with providers, an option called “negotiated rates.”

Some centrists are philosophically opposed to a public option, fearing it could put private insurance committees out of business.

The Medicare-based plan, called the “robust” option or “Medicare Plus 5” in the jargon that has emerged on Capitol Hill, ties provider reimbursement rates to Medicare, adding 5 percent.

That option saves the most money, according to congressional analysts, by competing with those companies and driving down premiums.

The 10-year cost of coverage has also been brought below President Obama's threshold of $900 billion.

Leaders are still getting cost analyses or “scores” from the Congressional Budget Office on other public option alternatives, aides said. There might be a caucus meeting Wednesday night to discuss the scores.

The Medicare Plus 5 option has overwhelming support within the caucus, but Pelosi may struggle to get the 218 votes needed to get a majority in the House. Republicans are expected to unite against it.

Also, the Senate Finance Committee passed a bill without a public option, and key senators have said it cannot pass.

And there are members who are troubled by other issues, like the income surtax on the wealthy that would fund subsidies for premiums, and questions of whether taxes would fund abortions.

Senators have also indicated that the surtax couldn’t pass the Senate. But a majority of House Democrats have come out against the Senate's funding plan – a tax on high-value healthcare plans.

This story was updated at 10:45 p.m.