Oct. 24 (Bloomberg) -- Senate Democrats are leaning toward including a government-run insurance plan in a health-care measure that would let individual states opt out, a proposal House leaders signaled would be acceptable.
The establishment of the so-called public option to compete with private insurers is opposed by Republicans and has split Democrats. To get support from reluctant members of his party, Senate Democratic Leader Harry Reid of Nevada is likely to include the opt-out version in the legislation, said a Democratic aide who requested anonymity.
House Speaker Nancy Pelosi, who backs what she calls a more “robust” form of the public option, was asked yesterday about the Senate proposal at a Washington press conference. “I don’t think there’s much problem with that,” she said.
“At the end of the day, we will have a public option in our legislation,” Pelosi, a California Democrat, said. “It’s good, better, best. We’re having that debate.”
Lawmakers are considering the biggest health-care changes since the creation of Medicare in 1965. The legislation, President Barack Obama’s top domestic priority, attempts to curb costs while covering tens of millions of the uninsured.
Pelosi and Reid are combining versions of the legislation passed by committees in their chambers to produce one House bill and one Senate measure. Assuming each chamber approves their versions, House and Senate lawmakers then would work together on a compromise measure that would be subject to a new round of votes.
Senate Bills
Reid is melding a measure passed on a party-line vote by the Senate health committee in July with an $829 billion proposal approved by the finance committee on Oct. 13 that support from a single Republican, Maine Senator Olympia Snowe.
The Congressional Budget Office’s preliminary estimate of the House measure puts the cost of expanding health-insurance coverage to 95 percent of Americans at $871 billion, according to Pelosi’s office. The budget office estimates that 83 percent of Americans now have health insurance.
That preliminary estimate is premised on doctor- reimbursement rates pegged to Medicare. The total cost will be $40 billion to $50 billion higher when the budget office includes programs that don’t provide health-insurance coverage, said Brendan Daly, a spokesman for Pelosi.
Analysis Continues
The cost of those programs, such as public health initiatives, are still being analyzed by the budget office, he said. Pelosi said yesterday that “the bill will be paid for over 10 years, it will reduce costs, but it will also not add a dime to the deficit” in the subsequent 10 years.
Senator Kent Conrad, a North Dakota Democrat who’s played a leading role in seeking a bipartisan compromise, said earlier this week that Reid and White House officials are tilting in favor of a public option that would allow states to decide not to participate. It would also negotiate rates with providers, as private insurers do, instead of pegging them to lower levels paid by the Medicare government program for the elderly.
“What I’m hearing is this is the direction of the conversation,â€
Health insurers’ shares were little changed after losing ground for much of the past month on concern the legislation would cut into profits. The Standard & Poor’s index of 13 managed-care companies rose as much as 1.4 percent yesterday before falling back. Over the past month, it has dropped 7.4 percent.
Senate inclusion of a public option risks losing the support of Snowe, who has proposed a plan to start a government insurance plan only if there isn’t enough competition among private insurers to keep rates low.
Snowe said Oct. 22 she would vote with other Republicans to keep a bill with a public option from even reaching the Senate floor for consideration.
Snowe’s Importance
Her stance is important because Democrats such as Nebraska Senator Ben Nelson say a health-care bill has to have some Republican support to win his vote. Snowe’s backing for a measure also might bring along more Republicans, such as fellow Maine Senator Susan Collins.
“A public option at the forefront really does put the government in a disproportionate position with respect to the industry,” Snowe said in an interview with Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend.
Aiming for Consensus
House Democratic leaders are trying to gain consensus among the party’s rank and file for a public option that would peg doctor reimbursements to Medicare rates, which would present a stronger challenge to private insurers.
Pelosi said yesterday no decision has been made. Since the Senate now has a “strong possibility” of including a public option, the calculus in her chamber may have changed, she said.
“This is about the end game now,” she said. “If we think it’s negotiated rates at the end of the day, would we like to shape that outcome?”
House Democratic Whip James Clyburn said he expected legislation to be introduced next week to the full House. “We will roll out something,” he told reporters.
Inclusion of a public option in Senate legislation would satisfy Democrats including Chuck Schumer of New York and Jay Rockefeller of West Virginia, who say it’s necessary to bring down costs.
Purchasing Exchanges
All the measures being considered by Congress require that Americans get insurance, creating online purchasing exchanges and tax credits to help. The bills also restrict insurers’ ability to deny people coverage and encourage greater use of preventive care, electronic records and research on the effectiveness of treatments.
Pelosi also said the House legislation would accelerate the elimination of a gap in coverage of a drug benefit for Medicare recipients.
The coverage gap, known as the doughnut hole, begins when elderly recipients amass a certain amount of drug expenses, currently $2,700. Coverage resumes after recipients pay all of the next $3,454 in drug costs.
The changes Pelosi announced would eliminate the gap in 10 years instead of 15, as originally proposed, and raise the threshold for losing coverage by another $500 worth of expenses next January instead in January 2011.
A PhRMA spokesman, the trade group that represents drugmakers and negotiated changes to the doughnut hole with the Obama administration, declined to comment on the latest proposal.
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Topic: U.S. Lawmakers May Be Moving Toward Consensus on Public Option (Read 374 times)