The Senate Finance Committee added a quasi-public option to the healthcare reform bill Thursday.

Two days after Chairman Max Baucus (D-Mont.) and a few other Democrats joined Republicans to defeat amendments to create a national government-run public option health insurance program, the committee voted in favor of a proposal by Sen. Maria Cantwell (D-Wash.) to enable states to form their own public options.

{mosads}”This proposal is about giving federal dollars to the states and putting them in the driver’s seat,” Cantwell said. “It is a public plan, but negotiated with the private sector.”

All Democrats except Sen. Blanche Lincoln (Ark.) voted to support the Cantwell amendment and all Republicans voted against it. Baucus, who has resisted adding a public option of any kind to his bill based on the argument that there is not enough support in the Senate, was enthusiastic about Cantwell’s proposal. “This is a great amendment,” he said.

Under the Cantwell amendment, people with incomes between 133 percent and 200 percent of the federal poverty level who do not get insurance at work would enroll in these state-based programs. The federal tax credits that would otherwise have been given to those individuals would instead be paid to states to finance the plan. Cantwell based her amendment on a program in Washington state.

States could choose to set up their plans, which would negotiate with medical providers on payment rates rather than base them on Medicare’s fees, as other public option plans would do. Cantwell and Baucus said the amendment would save money. “We are putting someone in charge, finally, of negotiating rates,” Cantwell said.

The benefits offered by these state plans would have to be at least as good as under Medicaid or through a private plan sold through the health insurance exchange in the legislation.

Republicans complained that any claims that the state plans would save money were purely speculative because Cantwell’s amendment has not been scored by the Congressional Budget Office (CBO). “There is no CBO score to tell us that,” said Sen. Jim Bunning (R-Ky.). “We don’t know that.” Republicans also pointed out that Baucus had ruled numerous GOP amendments out of order because there were not CBO scores.