Senate bill includes public option

By Robert Pear and David M. Herszenhorn - New York Times News Service

WASHINGTON — The Senate majority leader, Harry Reid, sided with his party's liberals Monday and announced that he would include a government-run insurance plan in health care legislation that he plans to take to the Senate floor within a few weeks.

His proposal came with an escape hatch: A state could refuse to participate in the public insurance plan by adopting a law to opt out. Even so, the announcement was a turning point in the debate over how much of a role government should play in an overhauled health care system, and it set the stage for a test of Democratic party unity.

With Republicans united for now in opposition to any bill including a public option, Reid needs support from all members of his caucus — 58 Democrats and two independents — to take up the legislation. Aides said Monday that he appeared to be short of that goal, lacking firm commitments from several members of the caucus.

Should Reid prevail, both houses of Congress would be poised to act on bills including a government-run plan to compete with private insurers in selling health coverage to consumers. The House is still weighing the details of its approach, but Democratic leaders there have made clear they will include a government plan in their version of the legislation.

Just weeks ago, the prospects for such an approach seemed remote, reflecting all-out opposition from conservatives to what they considered an excessive government role in the economy and a lack of enthusiasm from many moderate Democrats. But the idea has consistently drawn strong support in national polls and has the White House's backing though not its particularly active public support.

"The best way to move forward is to include a public option with the opt-out provision for states," said Reid, D-Nev. "I believe that a public option can achieve the goal of bringing meaningful reform to our broken system."

Reid's decision was acclaimed by liberal organizations like MoveOn, Families USA and Health Care for America Now, a coalition that includes labor unions and civil rights groups.

And Robert Gibbs, the White House press secretary, said President Barack Obama was pleased with Reid's decision. "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.

But Reid lost the one Republican who had given Democratic efforts a tinge of bipartisanship, Sen. Olympia J. Snowe of Maine. She has been pushing for a different approach in which a government plan would become available only if states did not make progress in reducing insurance premiums and covering more of their people.

"I am deeply disappointed with the majority leader's decision to include a public option as the focus of the legislation," Snowe said.

Other Republicans and insurance companies assailed the decision. "No matter what you call it or how you dress it up, the Democrats' proposal is government-run insurance," said Sen. Jon Kyl of Arizona.