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The Public Option Rides Again

By Jane Norman, CQ HealthBeat Associate Editor

October 23, 2009 -- An array of public option possibilities in the health care overhaul now confronts House Democrats, who just a short time ago saw the concept nearly scuttled after a tumultuous August recess.

Democrats debated as many as four paths for a public option in HR 3200 during a closed caucus on Friday morning. Meanwhile, Senate Majority Leader Harry Reid is dropping hints that the Senate might include a public option in the merged legislation that he's shaping if there's a way for states to opt out, though Senate liberals don't care much for that idea.

Suddenly, a public option that would compete with private insurers in the health exchanges is back in the center ring, along with the headlines and strong emotions it inspires.

But instead of a debate over whether a government-sponsored plan will open the floodgates to a government takeover of health insurance, House Democratic leaders said they are hashing out in caucus the best position to take in anticipation of a conference committee fight.

The "robust" option that would pay providers based on Medicare rates—except for physicians, who would get 5 percent more for the first three years—may no longer be the favored route, and it was unclear if it could ever get the 218 votes needed. Physicians would have to sign up for the "robust" public option if they took Medicare patients.

Democratic moderates favor the weaker versions of a public option, which would involve negotiated rates and wouldn't force physicians to participate if they accept Medicare.

Both House Speaker Nancy Pelosi and Clyburn said at a press conference Friday that no decision has been made on the form of public option the caucus might back, robust or otherwise, and they said they want to take their time.

"Part of the decision is not just about votes," said Pelosi, who sounded much less wedded to the "robust" version she had favored and the caucus appears to be spurning. "Part of it is the end game of conference."

Pelosi said "the atmosphere has changed" since earlier in the year, when House leaders perceived that it wouldn't be possible for the Senate to have enough votes for a bill with any public option. "It became really important to go with the most muscle for the middle class with a robust public option," she said.

Now that there is a "strong possibility" of a public option in the Senate bill very similar to the House Energy and Commerce version, "then I have to discuss again with my colleagues, what's the best approach for conference," she said.

"If we think it's negotiated rates at the end of the day, would we like to shape that outcome but with our own negotiated rates? Or do we still think it's better to go to the table with that? So this is about the end game now."

There's no philosophical difference in the public options under study, only the cost, she said. "Sometimes I could argue either way and a lot of it depends on the progress the Senate has made," said Pelosi.

She and Clyburn also seemed to have little problem with the Senate idea of allowing states to opt out. "We're trying to get competition in to the market," said Clyburn. "I can't imagine any state saying to its citizens we are going to expose you to less competition or no competition."

Clyburn told reporters that Democrats are looking at variations such as starting out the public option with negotiated rates and a trigger. If the rates negotiated with insurers don't produce enough in savings, Medicare rates plus 5 percent for physicians could be implemented. Yet another hybrid would include negotiated rates and an expansion of Medicaid.

The discussion may mean that House Democrats might have to abandon their hopes of bringing a merged bill to the floor as soon as next week.

"We'll see," Pelosi said when asked about the timetable for bill introduction, following the press conference, at which she announced enhanced prescription drug benefits for seniors in the House legislation. "The wonderful thing about this is we know we will have a bill. It's just a question of when and how soon."

Clyburn said it's a big change. "When we got back here after Labor Day, I remember the headlines, 'Health Care Reform Dead,'" he said. Now, it's "whether we will get this form of public option or that form of public option," he said.

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