Pelosi moves to center on public option

Speaker Nancy Pelosi (D-Calif.) is shifting to the center on a government-run public health insurance plan, warming to a version that is being supported by some Blue Dog Democrats.

Pelosi’s recent public statements and private conversations indicate her willingness to move away from the more liberal proposal, which she had been promoting as being more cost-effective. The centrist view was negotiated with Blue Dogs to move the bill out of the House Energy and Commerce Committee. 

Liberals want a public option that is tied to Medicare rates plus 5 percent. Blue Dogs and other centrist Democrats want rates to be negotiated individually with providers.

Earlier this week, Pelosi said, “The differences are not as great as you may think when you take it down to its different parts.”

Pelosi brought the centrist option up Thursday with the Blue Dog leadership for the first time. And she promoted the savings it can deliver, saying it is more than the $25 billion originally thought.

“I think there are probably more savings in the negotiated rates, as well,” Pelosi later told reporters.

Her apparent shift comes at a critical time in the healthcare debate, when both chambers are struggling to find enough votes to advance President Barack Obama’s signature domestic priority. In a sign of that trouble, House Majority Leader Steny Hoyer (D-Md.) announced Thursday that there won’t be a floor vote on the healthcare bill in the next two weeks.

Centrists, including many Blue Dogs, would prefer that if there is a public option in the healthcare bill, it be based on negotiated rates. Many of those members come from rural districts and feel that Medicare rates already shortchange providers.

The Energy and Commerce panel adopted the negotiated-rates version as a way to overcome the objection of several Blue Dog Democrats about Medicare rates and other issues.

Pelosi has said there will be a public option in the House bill. She has ruled out cooperatives and a so-called “trigger” fallback option.

Liberal and centrist leaders agree that the debate is moving in the direction of negotiated rates. It’s disappointing to liberal leaders, who scrambled Wednesday and Thursday to prove that their Medicare-based version had overwhelming support among Democrats.

“The momentum is to pass something,” said Raúl Grijalva (D-Ariz.). “For some people, negotiated rates is the easiest path. But negotiated rates effectively kills the public option.”
Liberal leaders brought the names of 150 Democratic supporters of the Medicare-rates approach to a meeting with Pelosi on Thursday, according to a Democratic source. It’s not clear if that was enough to get her to shift back to that approach.

“Yes, I think there’s momentum, “ said Blue Dog leader Rep. Stephanie Herseth Sandlin (D-S.D.). “They don’t have the votes for a public option with Medicare rates.”

But Grijalva noted that 46 members recently signed a letter pledging to vote against the centrist plan. In the numbers game of the House, that is significant, because Republicans are expected to unite against the healthcare bill. So if 39 Democrats oppose the plan, it wouldn’t get the 218 votes needed to pass. There are 52 Blue Dogs, as well as many other centrist members not in the coalition.

“With negotiated rates, you lose votes on the left,” Herseth Sandlin said. “ I don’t know that either public option can get 218 votes.”

Last week, House leaders promoted Medicare rates, saying they would save $110 billion over 10 years by driving down premiums. Negotiated rates, they said, citing unofficial Congressional Budget Office (CBO) numbers, would save only $25 billion.

The level of savings is important, because Obama wants the bill to cost $900 billion or less. So House members need to cut $200 billion from their plan.

But Pelosi and Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) on Thursday were promoting the savings from the version with negotiated rates, saying there’s more than $25 billion.

“There’s clearly more savings in a public option tied to Medicare rates,” Waxman said. “But if we go to negotiated rates, there are more savings than just the $25 billion identified by CBO.”

Pelosi told Blue Dog leaders in a meeting Thursday that she wants the CBO to “sharpen its pencil” and find more savings in negotiated rates, Herseth Sandlin said.

Even if Pelosi settles on a public option, there are still several more problematic issues to resolve, such as whether to raise taxes on the wealthy to pay for it, and whether the bill would allow taxpayer dollars to go toward abortions.

The Senate is not expected to pass a bill that includes a public option, as many leading Democrats in the chamber say they don’t have the votes. Though many centrist House Democrats are wary of casting a vote on a bill that won’t ever become law, Pelosi wants to include a public option in the House version to pull the negotiations to the left.

“We will go to the table with that strength when we are ready,” Pelosi said Thursday. “But what happens in conference is another step along the way.”