Senate may drop public option

PRIVATE-SECTOR ALTERNATIVE
Reid says he is optimistic about bill after deal

By Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Wednesday, December 9, 2009

Democratic Senate negotiators struck a tentative agreement Tuesdaynight to drop the controversial government-run insurance plan fromtheir overhaul of the health-care system, hoping to remove a last majorroadblock preventing the bill from moving to a final vote in thechamber.

Under the deal, the government plan preferred by liberals would bereplaced with a program that would create several national insurancepolicies administered by private companies but negotiated by the Officeof Personnel Management, which oversees health policies for federalworkers. If private firms were unable to deliver acceptable nationalpolicies, a government plan would be created.

In addition, people as young as 55 would be permitted to buy intoMedicare, the popular federal health program for retirees. And privateinsurance companies would face stringent new regulations, including arequirement that they spend at least 90 cents of every dollar theycollect in premiums on medical services for their customers.

The announcement came after six days of negotiations among 10 Democrats -- five liberals and five moderates -- appointed by Senate Majority Leader Harry M. Reid(D-Nev.) to work out differences between the two camps on the publicoption and other pressing issues. Appearing in the Capitol with Sen. Charles E. Schumer (D-N.Y.), the leader of the liberal faction, and Sen. Mark Pryor(D-Ark.), representing moderates, Reid hailed the deal as a broadagreement that has the potential to "overcome a real problem that wehad" and push the measure to final Senate vote before Christmas.

"Not everyone is going to agree with every piece," Reid said. Butwhen asked whether the deal means the end is in sight after nearly ayear of work on President Obama's most important domestic initiative,he smiled. "The answer's yes," he said.

According to a Democrat briefed on the talks, the deal representsonly an agreement among the 10 negotiators to send the new package tocongressional budget analysts, not an agreement to support itselements. One of the negotiators, Sen. Russell Feingold (D-Wis.), quickly issued a statement criticizing the deal.

"While I appreciate the willingness of all parties to engage ingood-faith discussions, I do not support proposals that would replacethe public option in the bill with a purely private approach," he said.He added, however, that he will base his vote "on the entirety of whatis in the bill, and whether I think the bill is good for Wisconsin."

Democrats must also win the approval of several key lawmakers who have not been involved in the talks, including Sens. Joseph I. Lieberman (I-Conn.) and Olympia J. Snowe(Maine), the only Republican who has voted in favor of the Democratichealth initiative. If the Senate approves the agreement, it will face ahuge obstacle in the House, where Speaker Nancy Pelosi (D-Calif.) has fought hard to preserve a public plan in the face of opposition from House moderates.

If the deal holds, it will represent a major breakthrough on one of themost contentious issues of the health-care debate, settling a disputebetween moderates wary of excessive government intrusion into theprivate sector and liberals determined to create a strong competitorable to curb the most egregious abuses in the private insuranceindustry.

"It may be different from what was previously included in the bill,"said Reid spokesman Jim Manley, "but it accomplishes the same goals asa so-called public option."

Earlier in the day, the Senate turned back an amendment that wouldhave barred millions of Americans from purchasing subsidized insurancepolicies that cover abortion, as Democratic leaders struggled tomaintain a delicate party coalition. The amendment was rejected 54 to45. Although the outcome of the vote was not a surprise, the defeatcould cost Reid the support of Sen. Ben Nelson(Neb.), a conservative Democrat who has threatened to join a GOPfilibuster of the bill unless abortion restrictions are tightened.

Nelson is one of five moderates in the Democratic caucus demandingchanges to the legislation, forcing Reid to balance their concerns withthose of liberals as he seeks to maintain the 60 votes needed to push abill across the finish line. The biggest challenge has been determiningthe fate of the public option, a chief priority for progressiveDemocrats.

Key liberals said they were prepared to abandon a government-runinsurance program if it would move the chamber closer to a final deal,provided it was replaced with other coverage options and tighterrestrictions on insurance companies. "I don't think we're going to getthat right now," Sen. John D. Rockefeller IV (D-W.Va.) said of the public option. "So we're going for as strong a regulation guidance as we possibly can."

Democrats made a different calculation on abortion. Although the Housevoted Nov. 7 to bar their public plan from offering abortion coverageand to prohibit people from using federal subsidies to purchase privatepolicies that cover elective abortion, Senate Democrats rejectedNelson's measure, despite the potential threat to final passage. SixDemocrats joined all but two Republicans to support the tighter rules,but some Democratic abortion opponents -- including Reid -- opposed theamendment as too far-reaching.

In a speech on the Senate floor, Reid said the current Senatelanguage, which would allow individuals who qualify for insurancesubsidies to purchase abortion coverage with their own money,represented "a fair middle ground."

He told reporters that he will seek other avenues in attempting toallay Nelson's concerns, but added, "This is not the right place forthis debate. We have to get on with the larger issue at hand." Afterthe vote, Nelson said he will not rule out supporting the final Senatemeasure. "Let's see what develops. One thing I've found is that thefuture sometimes can surprise you," he said.

A series of pending amendments, including several popular measures,must be resolved before Reid can end debate on the bill and call afinal vote. On Wednesday, the Senate is expected to consider abipartisan effort to allow cheaper prescription drugs to be importedfrom Canada and other countries. And a group of Senate Democraticfreshmen is pushing a package of cost-control provisions, including anexpansion of an independent Medicare advisory board that would allow itto recommend changes to the entire health-care system.

Despite the full slate, Reid said he is optimistic. "Every day thatwe work on these amendments and do the negotiations we're doing," hetold reporters, "the closer we get to the finish line."

After the vote, Nelson returned to the talks about the publicoption. In addition to the ideas accepted late Tuesday, the group hadbeen discussing an additional expansion of Medicaid eligibility, anidea that many moderates dismissed as too expensive. Many also havedoubts about letting younger people who do not have access to coveragethrough an employer buy into Medicare.

By some estimates, that idea could add as many as 3 million peopleto the financially struggling program. The Congressional Budget Officehas estimated that those these individuals could face annual premiumsof as much as $7,600. And because such a program could encourage peopleto retire earlier than they might otherwise, a buy-in program couldincrease Social Security costs for the federal government.

Still, key senators, including Snowe, said they would be willing todiscuss a Medicare buy-in program so long as states with particularlylow Medicare reimbursement rates were compensated and a mechanism wasadopted to ensure that Medicare would not suffer financially because ofthe expansion.