Rockefeller's public option defeated 8-15 in Senate Finance Committee vote

The Senate Finance Committee rejected Sen. Jay Rockefeller’s (D-W.Va.) amendment to tack a public option onto the committee’s healthcare bill.

After nearly four hours of debate, the amendment fell on an 8-15 vote, with Republicans united against it and Democrats vociferously defending the notion of providing people with a not-for-profit insurance company backed by the government.

But Democrats on the committee did not mirror the GOP’s unity. As expected, Baucus and Democratic Sens. Tom Carper (Del.), Kent Conrad (N.D.), Blanche Lincoln (Ark.) and Bill Nelson (Fla.) joined all 10 of the panel’s Republicans to vote down Rockefeller’s amendment. Notably, Baucus and Conrad, along with Sen. Jeff Bingaman (D-N.M.), spent months trying to strike a deal with three committee Republicans.

Rockefeller issued strong condemnations of the health insurance industry. “The insurance companies, in my judgment, are dedicated to protecting their profits and put their customers second. It’s a harsh statement but a true statement,” he said.

Health insurance companies are “rapacious,” Rockefeller said, pointing to industry practices such as rescinding policies or jacking up premiums when people get sick. “It’s a subject that ought to make us very angry,” he said, but “in the face of all of this, we’re giving them a half a trillion dollars in subsidies. I don’t understand that.”

Baucus said he left the public option out of the bill, and voted against Rockfeller’s amendment, because he did not believe it had enough support in the Senate to make it all the way to President Barack Obama’s desk. “My job is to get a bill that can get 60 votes,” he said. “I can count.

“If this provision is in the bill coming out of the committee, it will jeopardize real, meaningful healthcare reform,” Baucus said. “I want a bill that can become law.”

Nevertheless, Baucus indicated that he has no objection to the proposal itself. “I see a lot to like in the public option,” he said. “The public option would help to keep the insurance companies’ feet to the fire. There’s no doubt about that.”

But Baucus defended his chairman’s mark of the bill, pointing to new insurance market reforms requiring companies to sign up anyone regardless of pre-existing conditions and limiting insurers’ ability to charge higher premiums to older and sicker people. The bill also would assess $67 billion in fees on insurers over 10 years. ”Some of your questions sort of leave the indication that the mark is easy on the insurance industry, and it’s not,” Baucus said.

“We need a public option to create competition and bring down costs,” said Sen. Charles Schumer (D-N.Y.), who will bring up a separate public option amendment later in the committee markup.

The Congressional Budget Office (CBO) estimates that by 2015, about 8 million people would sign up for Rockefeller’s plan, though that number would decline as pay rates to medical providers rise above what Medicare pays after two years. Over 10 years, Rockefeller’s public option would save the federal government $50 billion, the CBO projects.

Conrad touted his proposal to create not-for-profit healthcare cooperatives and said that payments to medical providers under Rockefeller’s amendment would be too low and “would bankrupt every major hospital in my state. ... I can’t possibly support an amendment that does that.” Bingaman, a public option supporter who voted for a healthcare bill in the Health, Education, Labor and Pensions (HELP) Committee, said Rockefeller’s amendment is “not my preferred choice” for the same reason.

Sen. Orrin Hatch (R-Utah) succinctly summed up the Republican view: “A new government plan is nothing more than a Trojan horse for a single-payer healthcare plan in Washington,” he said. “The end result would be a government takeover of our healthcare system.”

Finance Committee ranking member Chuck Grassley (R-Iowa) wielded an old quotation from President Barack Obama’s 2004 Senate campaign, as well as quotes from Democratic Reps. Jan Schakowsky (Ill.) and Barney Frank (Mass.) and Washington Post columnist Ezra Klein as proof that liberals see the public option as a backdoor to eventually implementing a single-payer system. “The government is not a competitor. It’s a predator,” Grassley said.

The Finance Committee isn’t finished with the public option debate, however. Schumer’s amendment is due for a vote later Tuesday and Republican Sen. Olympia Snowe (Maine) could also raise her amendment that establish a “trigger” that would institute a public option in states with too few private insurance choices. In addition, Democratic and Republican senators have filed amendments to modify or strip Conrad’s language in the bill to create not-for-profit healthcare cooperatives as an alternative to private insurance.

But the committee remains unlikely to advance its legislation with a public option included. Senate Majority Leader Harry Reid (D-Nev.) will have to hash out whether the healthcare reform bill that goes to the floor features a public option, however, because the HELP Committee already approved a bill that has one. Reid said last week that while he supports the public option, he think’s Snowe’s trigger proposal is a “doggone good idea” and preferable to Conrad’s co-ops.

Rockefeller declared that the fight is not over. “Public option is on the march,” he said.

The ultimate fate of the public option on the Senate floor is unclear. Liberals strongly back the idea, but centrist Democrats range from opposed to skeptical. But HELP Committee Chairman Tom Harkin (D-Iowa) said Tuesday that he is confident that a public option could win a majority of votes in the Senate. “I have polled senators, and the vast majority of Democrats — maybe approaching 50 — support a public option,” Harkin said on the liberal "Bill Press Radio Show."

Michael O’Brien contributed to this article.