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Reid Will Wrap Public Plan Into Senate Health Bill

By Kathleen Hunter and Drew Armstrong, CQ Staff

The Senate's health care overhaul will include a government-run plan, written as an "opt-out" policy that gives states the choice not to participate.

Senate Majority Leader Harry Reid, D-Nev., announced the decision to include the "public option" in Senate bill on Monday afternoon, stating, "I believe there's strong consensus to move forward in this direction.

Reid said his decision was based on "countless hours" in consultation with senators over the last few days.

"The best way to move forward is to include a public option with an opt out provision for states, who will have the ability to opt out if they so choose," he said.

Reid said he would submit bill language to the Congressional Budget Office for scoring later in the day.

Reid has been writing the bill with Finance Committee Chairman Max Baucus, D-Mont., and Sen. Christopher J. Dodd, D-Conn. Under the plan, states will have until 2014 to opt out of the plan.

Like the proposals passed out of both panels, the merged bill would set up health care "exchanges," through which qualifying individuals would be able to purchase health insurance, a Reid aide said. The aide said the merged bill would allow exchange participants who reside in states that do not opt out of the government run plan to participate in a a public plan.

"I believe it's an important way to ensure competition and level the playing field," Reid said.

Reid said the proposal would retain Finance Committee language that would provide seed money to set up health care "co-operatives," and the aide said those co-ops could be another option that exchange participants could choose.

When asked about the process by which states would opt out of the public plan, Reid replied, "The legislature would have to to act. No further details were immediately available.

Although Reid described a "consensus that was reached within our caucus and with the White House," he warned that the public option approach was "not a silver bullet," and stopped short of predicting 60 Democratic votes for the legislation.

"I believe that as soon as we get this bill back from CBO and people have the chance to look at it, I believe we clearly will have the support of my caucus to move to the bill and start legislating," he said.

Reid said Maine Republican Sen. Olympia J. Snowe, a heavily courted moderate who to date has been the only Republican to support a Democratic health bill, would not be part of leadership's plans to move forward.

"She does not like a public option of any kind," Reid said, adding that he had spoken with Snowe on Friday about his plans.

Key moderates such as Ben Nelson, D-Neb., and Snowe say the decision on the public plan will weigh heavily on whether they will support the bill. While Snowe opposes it outright, Nelson said last week would put him in a "difficult position."

Nelson spokesman Jake Thompson said following Reid's announcement that Nelson was "noncommittal" about the prospect of voting to help a bill with a state opt-out provision overcome procedural hurdles in the Senate.

Snowe favors a "trigger" for the public option, which would have the plan go into effect only if other health care proposals are unsuccessful in bringing down health care costs. Nelson prefers an "opt in" policy, which would let states set up their own government-run health insurance plans if they chose to do so.

Majority Whip Richard J. Durbin, D-Ill., endorsed the opt-out in a Senate floor speech Monday.

"I can't think of a better approach," Durbin said, adding, "I don't think opt-out is an unfair approach . . . the people and the state will have the final say—in the next election—whether the governor and the state made the right choice."

The opt-out approach gives Democratic leaders latitude to fall back to the trigger proposal championed by Snowe, if support for the opt-out falters on the floor.

White House spokesman Robert Gibbs said in a statement that President Obama was "pleased" with the Senate's approach.

"As he said to Congress and the nation in September, he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition," Gibbs said.

Several White House officials—including Chief of Staff Rahm Emanuel—have participated in closed-door talks with Reid, Dodd and Baucus over the last two weeks about what should be included in the bill that comes to the Senate floor.

A top Senate Republican predicted that the opt-out plan would essentially result in a nationwide government-run insurance plan, much like the original public option Democrats proposed.

"I know how hard states try to get Medicaid waivers, and it's really hard," said Senate GOP Whip Jon Kyl of Arizona, referring to the exceptions the federal government grants to states to expand Medicaid. "So are you going to feel really good if your state has the ability to opt out if the secretary's going to be the one who gets to decide that, and she's very much for government-run insurance?"

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