Public Option Back From the Dead?

Photo: Harry Reids Public Option

As ABC News first reported last week, Senate Majority Leader Harry Reid, D-Nev., is including a new government-run health insurance program, the so-called public option, in the health care bill he will bring to the Senate floor.

Such a significant breakthrough greatly increases the chance that the public option, once considered dead in the Senate, will be part of the final health care bill.

VIDEO: Senator Claire McCaskill on Health Care Reform

Reid made the announcement at a news conference this afternoon, although he is still days away from releasing the actual language of the legislation he'll bring to the Senate floor.

"As we've gone through this process, I've concluded -- with the support of the White House, Senators Dodd and Baucus -- that the best way to move forward is to include a public option with the opt-out provision for states," Reid told reporters. "I think it's the fairest way to go."

States would have until 2014 to opt out of any public plan.

Without offering any other specifics on the plan, Reid said he will send the bill today to the Congressional Budget Office, which will need to provide a cost estimate before the bill is formally introduced. The earliest the Senate will begin debating the bill is next week.

Reid expressed confidence that he has enough votes for the public-option measure, and the bill, to pass the Senate.

"As soon as we get the bill back from CBO, and people have a chance to look at it -- which we'll have ample time to do that -- I believe we clearly will have the support of my caucus to move to this bill and start legislating," he said.

On ABC News' "This Week With George Stephanopoulos" Sunday, Democratic Sen. Claire McCaskill of Missouri said while Reid's bill would include a national, non-profit government insurance plan, senators will vote on three options on how such a plan would be implemented.

In Reid's version of the public option, the new government insurance company would negotiate payment rates with health care providers, unlike the "robust" version favored by Speaker of the House Nancy Pelosi, D-Calif., which would tie payments to Medicare's rates.

The public option was included in the bill passed by the Senate Health, Education, Labor and Pensions Committee but some Democrats, such as Sen. Max Baucus, D-Mont., insisted that it would not pass on the Senate floor. In place of public option, the chairman of the Finance Committee suggested in his bill -- which passed the committee earlier this month -- that co-ops be created to compete with the private sector.

Reid today said co-ops will also be part of the bill, which melds the two Senate legislations, but he provided no additional details.

The White House praised Reid and other Democratic lawmakers for their work.

"Thanks to their efforts, we're closer than we've ever been to solving this decades-old problem. And while much work remains, the president is pleased that at the progress that Congress has made," White House Press Secretary Robert Gibbs said in a written statement. "He's also pleased that the Senate has decided to include a public option for health coverage, in this case with an allowance for states to opt out."

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