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.

Rockefeller Is Looking Into Public Option Opt-Out

The Hill is reporting that Sen. Jay Rockefeller (D-WV) is looking very carefully at the public option opt-out "compromise":

"I think there's one way that could work very well and could pick up some of the moderates," Rockefeller told reporters. "I'm looking very much now at this opt-out public option." Under the alternative proposal, the public option would be available nationwide but individual states could decline to participate.

So far, Rockefeller has been one of the strongest defenders of a real public option in the Senate, so his openness to the opt-out is clearly a disappointment. It could be a sign that the idea is gaining some traction in the Senate with Reid likely to make a decision about the public option in the coming days.

I've personally have been no fan of the opt-out and have laid out several of the problems with the idea. Primarily, it is people in red states who most need a public option and they are the ones most likely to be denied it with an opt-out.

The nicest thing I can say is Rockefeller did use the phrase "there's one way that could work very well." In theory, an opt out could be designed to make it very unlikely a state would opt out. For example, if states that opt out were required to fully reimburse the federal government for the resulting increase in cost, I doubt many would. Given what I know about Harry Reid and the Senate Democrats, however, I'm not holding my breath on that.

I suspect any opt-out compromise Reid would accept would be a weak public option with a very easy opt-out. The result would be hundreds of millions of dollars spent by the insurance industry lobbying to make sure most of the red and purple states opt-out in the next three years--before the public option is even made available. Progressives should be about helping all Americans in need, not just Americans lucky enough to live in blue states. (And even blue states may not be safe with potential Democratic governors like Creigh Deeds.)

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?