Obama And Reid Maybe Leaning Towards Opt-Out

Sen. Ben Nelson (D-NE) told Poltico that he felt Harry Reid (D-NV) and the White House were leaning toward a national public option with an opt-out:

Finance Committee Chairman Max Baucus (D-Mont.) briefed Nelson and other Democratic centrists on Thursday morning.

"I keep hearing there is a lot of leaning toward some sort of national public option, unfortunately, from my standpoint," said Nelson, a key swing senator. "I still believe a state-based approach is the way in which to go. So I'm not being shy about making that point."

Sen. Chuck Schumer (D-NY) has been pushing strong for a national public option (presumably his “level playing field” plan) with a provision that would allow states to opt out if they choose. Given how closely Schumer has been working with Jay Rockefeller (D-WV) on the issue of the public option, I assume Schumer's personal push for the opt-out compromise played a large part in Rockefeller's public expression of tentative support for the opt-out.

Many important questions about the opt-out idea remain to be answered. What kind of national public option would it be (negotiated rates or rates tied to Medicare)? How would states opt-out (decree by governor, pass a bill, popular vote by state legislature, state wide referendum, etc.)? How soon could a state opt out (right away or not until 2013)? What would a state need to do to opt back in if it previously opted out? Who will pay for the added cost of states opting out?

Depending on the answer to these question only a few states might opt out, or over half the people in this country might be denied access to the public option.

Wyden Is Causing Trouble Again (For Reid)

Senator Ron Wyden's annoying insistence that Democrats not lie to the American people about health care reform is causing trouble for the party leadership again. His office was not happy with a new talking point sent out by the leadership, falsely claiming that if you don't like your current health insurance you would be offered a new, affordable choice.

That drew a quick rebuttal, not from Republican Leader Mitch McConnell, but from Wyden’s Communications Director Jen Hoelzer. Here's what she sent to 490 Democratic Communicators:

I just wanted to flag for colleagues that their bosses should be careful using the talking point that under the Dem bill, Americans who don’t like the coverage they have, will be able to choose something else. As CBO Director Elmendorf indicated last week, under the current legislation, seven years after implementation, more than 90 percent of Americans will remain barred from shopping for insurance in the exchange. This means that not only will MOST Americans be stuck with the coverage they have – whether they like it or not – if reform establishes a public option, more than 90 percent of Americans won’t be able to choose it. As many of you know, this is why Senator Wyden has been fighting so hard to get his Free Choose proposal into the bill, so that we can tell our constituents that if you don’t like the coverage they have, they can choose something better. But right now, that’s not the case. Let me know if you have any questions. Jen

Will Harry Reid bring the hammer down on Wyden for stepping out of line, like he did on Chuck Schumer for publicly saying it would be Reid's fault if the Senate bill lacked a public option:

They even printed out a copy of the Maddow transcript so that Reid could read it back to Schumer, a person familiar with the situation told POLITICO.

Reid, who has never been shy about jabbing Schumer when the aggressive New York Democrat oversteps, eventually caught up with Schumer on the Senate floor Wednesday and asked him about the quotes.

Later in the week, Reid described the exchange as amenable [sic] — while making clear he was the boss.

“Any conversation I’ve had with Sen. Schumer about health care, including “The Rachel Maddow Show,” has been of a positive nature,” Reid told reporters. “Sen. Schumer is entitled to his own opinion.”

You hear that Wyden? Be prepared for Reid's wrath. You better get in line or Reid may sternly read notes to you and make snide comments behind your back.

Does Reid Even Read His Own Website?

On Senate Majority Leader Harry Reid's website, under health care reform, there is a debunking common myths section. The very first myth debunked is that:

Myth: The Public Plan Is No Longer An Option

Senator Reid supports the creation of a public option that would keep the insurance companies honest and provide care that puts patients first.

• The objective remains to develop legislation that reduces costs, improves outcomes, and protects choice and provide stability and security to our health care system. Senator Reid is working tirelessly to bring both sides of the aisle together and is hopeful that a quality, comprehensive, bi-partisan bill is within reach.


• Under the proposed health insurance reform bill, Americans would have the choice of private insurance company plans and also the option to choose coverage from a public plan. This public option would be offered through the health insurance exchange and would compete on a level playing field with private insurance plans to ensure private insurers operate honestly and reduce costs while improving services. Those who choose the public option would pay premiums for their coverage, and the public plan would use those premiums for operating expenses.

Reid's website is correct, the public plan is still very much alive--but it will likely stay alive only if Reid chooses to keep it alive. The Senate Finance Committee's bill did not contain a public option, but the Senate HELP Committee's bill did. It is completely up to Reid to decide how to merge these two bills. As Rockefeller and Schumer have pointed out, it is completely within Reid's power to put the Senate HELP Committee's public option in the merged bill.

As David Waldman explains, if Reid puts the public option in the merged bill brought to the floor it would take 60 votes to remove it and there are not 60 votes against the public option in the Senate. Conversely, if Reid leaves the public plan out, it would take 60 votes to add one, and there are not 60 votes for a stand-alone amendment for a public option.

“The public plan is no longer an option” is only a myth if Reid chooses to make it a myth. It is completely within Reid's power to make a real public option part of the Senate bill, but Reid also has the power to kill the public option in the Senate. So, will Reid make a liar of himself, or make a liar out of those claiming the public option is no longer viable?

Will Reid Submit To The Tyranny Of The Five?

In a conference call today, Senate HELP Committee chairman Tom Harkin (D-IA) again stated his conviction that health care reform will have a public option. In defense of the public option Harkin pointed out that a majority of Senate solidly supporting the idea.

"There are 52 solid Democrats for a public option and only about five Democrats really kind of opposed to it," Harkin added. "One has to ask if the 52 should give into the five or if the five should come on board with the vats majority. I think the answer is clear."

Not all Democratic senators need to vote for a bill with a public option, they only need to vote for cloture to end a filibuster of the bill. Conservative Democrat Mark Pryor (D-AR) doesn't think Democratic senators refusing to vote for cloture is a likely scenario. Even Joe Lieberman (I-CT) sounds unlikely to vote against cloture:

Lieberman said he was “inclined to let the motion to proceed” (or cloture) go forward, but “I haven’t decided yet.”

The public option has a strong majority in the Senate. So far, none of the five Democrats opposed to the public option have publicly given any indication they would let the whole of health care reform die because it contained a public option. Even if Democrats threaten to filibuster a bill with a public option, Reid can now choose to move the bill forward with only a simple majority using reconciliation.

As Rockefeller (D-WV) and Schumer (D-NY) have said, the decision to include a public option is completely in Reid's hands. Is Harry Reid going to let his caucus to be ruled by a tiny handful of senators or will he stand with the vast majority of his party?

Rockefeller Jumps on the "Blame Reid for Killing the Public Option" Bandwagon

In an interview with Bloomberg Television, Sen. Jay Rockefeller (D-WV) put the responsibility for getting a public option squarely on Senate Majority leader Harry Reid's shoulders.

HUNT: Well, let me ask you about that, because it would appear there are not the votes for the kind of public option that you’ve advocated and maybe even that Senator Schumer advocated.

Would you be willing to accept the Olympia Snowe proposal of a trigger? You’ve expressed reservations about it in past.

ROCKEFELLER: Harry Reid can put into that mark whatever he wants. And so if he puts in mine - less likely - Chuck Schumer’s - more likely, - if he decides to do that, then it’ll take 60 votes to take it out because it will be in the mark and that’s the genius of that melding of both ways.

Earlier this week, Sen. Chuck Schumer (D-NY) made waves by also preemptively placing blame on Reid should the Senate health care reform bill fail to contain a public option. The message is clear, if the bill brought to the Senate floor by Reid has a public option, there are not the votes to remove it. If Reid, solely in his power as majority leader, chooses to include a public option in the merged bill, it is almost assured that there will be a public option.

Rockefeller and Schumer may be trying to publicly put pressure on Reid to include the public option, or preparing to their explaination to supporters on why they failed to secure a public option. Most likely, it is a combination of the two. Regardless, Harry Reid is facing a tough choice. If he kills the public option to please a handful on conservative Democratic senators, he will face a tough election being branded as the man who singlehandedly killed the public option.

Blame Harry, If There Is No Public Option

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On the Rachel Maddow Show last night, Senator Chuck Schumer (D-NY) publicly delivered a message that is likely not to sit well with Senate majority leader Harry Reid. Schumer basically said it was completely up to Reid if he wanted to put a public option in the combined Senate bill that is brought to the floor. (The HELP bill contains a public option and the Finance bill does not.) Schumer also said if Reid puts a public option in the Senate bill, it would not be removed and likely become law.

Well, first leader Reid has the option of putting [the public option] in the final bill. If he puts it in the final bill, in the combined bill, then you would need 60 votes to remove it, and there are clearly not 60 votes against the public option. And so we're urging him to do that, and he is seriously considering it. Once it passes the Senate, if that were to happen, it is in the House bill, it is in the Senate bill, and it would have to be in the final product. So, it is very important to see if the public option is in the bill leader Reid puts together. He hasn't yet made up his mind, but many of us who believe in the public option are urging him to do so. So far, we are getting heard.

The message is pretty simple. Reid has the power to pass a public option. If the public option is killed in the Senate, the blame rests squarely on Reid. The question is, with a very tough election coming up, does Reid want to be know as the man who killed the public option?

Did Schumer Cause The AHIP Freak Out?

The individual mandate (without the public option) has been a top priority of the health insurance industry. Who would not want millions of new customers to be forced to buy their very expensive product?

Sen. Chuck Schumer has been working to actively cripple or destroy the individual mandate. An amendment offered in the Senate Finance Committee by Schumer and Snowe reduced the penalty for not buying health insurance, and slowly phased in the penalty over several years. It also reduced the threshold at which a person could apply for a hardship waiver to avoid paying the penalty for not having insurance.

That was only step one in Schumer's attempt to water down the individual mandate. Last Thursday, Schumer made a barely covered announcement that he would seek to further weaken the individual mandate. The penalty collected from people for not having insurance would be placed in a trust fund instead of going directly to the government. Individuals would have up to three years to use the full penalty collected from them to buy insurance.

This three-year trust fund is just asking to be “abused.” It would create a strong incentive for younger people to wait until they got sick to buy health insurance. They could skip having insurance for up to three years without “losing” any money due to the individual mandate penalty. This is exactly the scenario that AHIP is desperate to avoid. If there is to be any Republican support for health care reform, and with progressives threatening to go to war if there is an individual mandate without a public option, it is very likely we'll see the individual mandate continue to be weakened as the bill moves forward.

I do not know if it was solely Schumer's plan to gut the individual mandate that caused AHIP to go on the attack. His efforts to get a public option, regardless how weak, could also pay a role in AHIP fury. I think it is likely Schumer's actions played a big role in the health insurance industry choosing to release their highly dubious study. Weaken the individual mandate and health insurance companies lose a huge potental source of profits from healthy, young Americans forced into overpriced insurance plans.

Schumer Has Plan To Improve Individual Mandate

Senator Chuck Schumer (D-NY) has announced a new plan to improve the individual mandate. Instead of being a tax or fine paid directly to the government, the money will be taken from the individual and put into a trust. This individual trust fund could be used to purchase health insurance in the future.

Americans could keep up to three years’ worth of penalties to put towards premium payments; after three years, part of the payments would begin to be forfeited.

This change does not address several issues with the individual mandate. Mainly, should there be an individual mandate without sufficient subsidies to help people afford insurance? Also is it ethical to force people to pay a very large amount to private corporations?

Schumer's proposal does address the political problem of the individual mandate being a tax on families making below $250,000 a year. This is an improvement on how the individual mandate has been structured. It is still a fine because people will eventually “forfeit” the money to the government after three years, if they still don't buy health insurance. It does, though, make it easier for a person to avoid paying the fine by eventually buying insurance.

Unfortunately, it is an end run around the real problem with current health care reform legislation. If every American were truly guaranteed affordable quality health insurance, this would be less of an issue. Americans would be less concerned that people are being mandated to buy health insurance if they know it would really be affordable for everyone.