No quiet fadeaway for federal insurance option

updated 11:23 p.m. ET Oct. 14, 2009

WASHINGTON - Fears about high costs of the health care overhaul and mistrust of insurers are rekindling interest in letting the government sell health insurance as part of the plan.

The leading congressional proposal as of Wednesday — a Senate Finance bill that relies on private coverage with no new government plan — could price out some 17 million Americans. And the insurance industry may have unwittingly helped the case for public coverage with a report over the weekend asserting the Finance bill would raise premiums for everyone.

Business groups and conservatives remain steadfastly opposed to government insurance — formidable political opposition that shows no sign of weakening. So advocates are getting creative, trying to reformulate the "public option" in a way that can gain the 60 votes needed to clear the Senate.

Trying to provide choices
Instead of an all-or-nothing approach, they're trying to provide choices.

What if each state could decide whether to offer public coverage instead of having it decreed from Washington — as proposed by Sen. Tom Carper, D-Del.?

What if states had a menu of options, from nonprofit co-ops to using their own employee health plans?

What if public coverage were offered only as a backstop in areas where one insurer has a lock on the market?

"We are all talking together, trying to find something that not everyone will love but the entire (Democratic) caucus will come to agreement on," said Sen. Chuck Schumer, D-N.Y., who for months has been seeking a politically viable compromise.

"It's going to be something flexible, but not weak," Schumer added. His idea: a federal plan that states can opt out of.

The lone Republican to back health care overhaul legislation, Maine Sen. Olympia Snowe, has suggested a possible way out: allowing a public plan to kick in if competition among health insurance companies under a revamped system fails to bring down costs. Snowe is opposed to government insurance as a first-line solution.

What if Snowe's idea is combined with an approach that lets states make the call?

"Those are all elements that one could easily fashion into an outcome that would seem to be elegant," said economist Len Nichols of the New America Foundation. "It would show the left: 'Look we will be there when we're needed if coverage is not affordable.' And it would show the right that this not some backdoor government takeover, because we're only going where we're needed."

What to do about the public plan is the most politically sensitive issue on the agenda of Senate Majority Leader Harry Reid, D-Nev., as he sets out to merge the Finance bill with a Senate health committee version that does include a government option.

Another GOP senator open to health overhaul
The health overhaul drive got a potential boost Wednesday as a second Republican senator signaled she's open to voting for a health care bill. Sen. Susan Collins, R-Maine, told The Associated Press that the Finance bill needs substantial improvements to make coverage more affordable, contain costs and protect Medicare, but she joined Snowe in endorsing the goal of far-reaching changes.

"My hope is we that can fix the flaws in the bill and come together with a truly bipartisan bill that could garner widespread support," Collins said in an interview.

On Wednesday, top White House aides, including chief of staff Rahm Emanuel and Health Secretary Kathleen Sebelius, traveled to the Capitol to meet with Reid, Democratic Sen. Chris Dodd of Connecticut and Finance Committee Chairman Max Baucus, D-Mont., about combining the Finance bill with the Senate health panel measure.

Reid is giving no hints. Asked Wednesday if he thought it was likely there would be a public plan in his merged bill, he responded: "I'm not betting on health care. 'Likely' is in a game of craps."

Republicans say the fix is in for a public plan. Behind the scenes, Democrats will take Baucus' middle-of-the-road plan and turn it hard to the left, they say.

"We know that the bill written behind closed doors here in the Capitol will be another 1,000-page, trillion-dollar Washington takeover," said Senate Republican leader Mitch McConnell of Kentucky.

Democrats did try one new tack Wednesday, on an issue involving doctors. Senate Democrats are now pushing for quick passage of separate legislation to spare doctors a $247 billion cut in Medicare fees over a decade. That would raise federal deficits, but the White House says the increase should not count in the price tag for the health care overhaul.

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