Public Option Back From the Dead?

Oct. 26, 2009— -- 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.

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."

Will Public Option Pass?

Democratic sources said that Reid, after a series of meetings with Democratic moderates, concluded he could pass a bill with a public option, although not because there has been a new groundswell of support for the idea. Indeed, there are still a handful of Democrats who -- along with Sen. Olympia Snowe, R-Maine, and every other Republican -- oppose the idea.

Reid needs 60 votes and there are simply not 60 senators who support a public option. But sources say Reid is now convinced that Democratic critics of the public option will support him when it counts -- on the procedural motion, which requires 60 votes, to defeat a certain GOP-led filibuster of the bill. Once the filibuster is beaten, it only takes 51 votes to pass the bill.

And Democratic critics of the public option would get a chance to go on the record with their opposition by voting for an amendment to strip it from the health care bill. Under Senate rules, such an amendment would need 60 votes to pass. And while there may not be 60 votes in favor of a public option, there are also not 60 votes against it. So, it would remain in the bill.

His counterparts say Reid would not have included the option if he had not been confident about getting enough votes.

"There's nobody better at counting votes than he is," Sen. Chuck Schumer, D-N.Y., told NBC's "Meet the Press" Sunday. "I think we're very close to getting the 60 votes we need to move forward."

The move would almost certainly cost Democrats Snowe's support, the sole Republican in Congress who voted yes for health care legislation. Snowe has repeatedly said she is against the idea of a public option but she is open to the option of a "trigger" mechanism by which public option would go into effect if insurance companies did not provide affordable, accessible coverage.

And do far, it doesn't appear that any Republicans are on board with Reid's plan.

"We know there is nervousness among Democrats over this increasing view that Congress is acting like a teenager with their parents' credit card, not worried about who's going to have to pay the bill," Senate Minority Leader Mitch McConnell, R-Ky., said on "This Week."

Reid today said he is not completely abandoning bipartisanship by introducing public option, a thorny issue since the inception of the health care debate this summer. But he has been unable to find Republicans willing to work with him on overhaul, he said.

"I'm always looking for Republicans. We looked for Republicans on this. We looked for them on extending benefits for unemployment insurance. It's just a little hard to find them, and we've had to do a lot of this on our own," Reid said. "We're going to continue working. We invite Republicans to come and try to improve this legislation."

Sources say Reid's version of the public option is different from the more liberal version advocated by Pelosi in two ways. First, Reid's version would allow individual states to opt out of the program, giving public option critics the chance to say that their states retain the right to scrap the idea.

Second, under Reid's plan, the new government insurance program would have to negotiate payment rates with health care providers. Under Pelosi's plan, payment rates would be tied to the lower rates paid by Medicare.

Including a public option in a health care bill may not win bipartisan support but the most recent ABC News/Washington Post poll shows that a majority of Americans support it.