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Democrats Press Chairmen to Include Public Plan in Health Care Overhaul

By Alex Wayne, CQ Staff

April 29, 2009 -- Congressional Democrats appear increasingly determined to create a government-run insurance plan to compete with private insurers as part of a health care overhaul, despite warnings by Republicans, business groups, and insurers that doing so would mean the end of employer-sponsored health insurance.

On Wednesday, 15 Senate Democrats and one independent senator who caucuses with the Democrats sent a letter to the chairmen of committees writing the health care overhaul, urging them to include a "public plan option" in the legislation. The letter suggests broad support for the idea among Senate Democrats: the signers include liberal senators such as the independent Bernard Sanders of Vermont as well as the more conservative Jim Webb of Virginia and Kirsten Gillibrand of New York.

On the other side of the Capitol, meanwhile, Democrats on the Ways and Means Committee challenged a representative of a small-business trade group, the National Federation of Independent Business, to come up with a better proposal to cover the nation's estimated 46 million uninsured people at an affordable price, or accept that a government-run plan would be part of an overhaul.

And perhaps most important, the House adopted a fiscal 2010 budget resolution Wednesday that would allow a health overhaul to advance in the Senate without threat of a Republican filibuster. The Senate was poised to follow suit, despite some uneasiness about the use of the fast-track budget process to reshape the nation's health care system.

Democrats who support a government-run plan say such an option is necessary to force the private insurance industry to price its products more competitively and offer better service and coverage to consumers. The public plan would also ensure that people who can't find insurance through their employer and aren't poor enough to qualify for Medicaid could obtain coverage.

"We don't have everybody in the Democratic Caucus convinced, but there's a lot of people who think that private insurance operates a step ahead of the sheriff," said Sen. Sherrod Brown, D-Ohio, who helped organize the Senate letter with John D. Rockefeller IV, D-W.Va. Brown said he believes more Democrats would have signed the letter had they been asked.

But Republicans and private insurers say that any government-run plan is just a back-door route to a national, government-run health system. The public plan, they say, would eventually either lure all Americans by undercutting the prices charged by private insurers, or employers would decide to let the government handle the expensive burden of providing health care to workers and discontinue their insurance benefits.

"There's obviously real concerns about the effect a public plan would have on those who have health insurance," said Rep. Dave Camp of Michigan, the ranking Republican on the Ways and Means Committee.

Bipartisan compromise, Camp said, is difficult as long as no one knows what a government plan would look like: Democrats have not put the proposal into legislative language or even outlined it in policy documents.

It's also unclear what it would cost to create a government-run plan; Medicare, which covers about 43 million people, will cost about $425 billion in fiscal 2009.

"I don't think there's unanimity on that issue among Democrats," Camp said.

Indeed, Senate Finance Chairman Max Baucus, D-Mont., told reporters at a briefing last week that he didn't consider it a priority to include a government-run plan in the health overhaul that he is writing. His legislation, he said, would result in increases in private insurance coverage and public coverage through Medicaid and Medicare.

One Senate Republican aide suggested that the Brown-Rockefeller letter was a response to Baucus' remarks, intended to keep pressure on him and Health, Education, Labor and Pensions Chairman Edward M. Kennedy, D-Mass., to include a public plan in their legislation.

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