Government Health Insurance Option Appears Dead

Senior House Democrats have largely abandoned hopes of including a government-run insurance option in the final compromise health care bill taking shape, according to several officials, and are pushing for other measures to rein in private insurers.

House Speaker Nancy Pelosi and other senior Democrats told President Barack Obama in recent meetings they want the legislation to strip the insurance industry of a long-standing exemption from federal antitrust laws, officials said. That provision is in the House-passed measure, but was omitted from the bill that the Senate passed on Christmas Eve.

They also want the final measure to include a House-passed proposal for a nationwide insurance exchange, to be regulated by the federal government, where consumers could shop for private coverage. The Senate bill calls for a state-based system of exchanges.

Additionally, House Democrats want to require insurers to spend a minimum amount of premium income on benefits, thereby limiting what is available for salaries, bonuses, advertising and other items. The House bill sets the floor at 85 percent; the Senate-passed measure lowers it to 80 percent for policies sold to small groups and individuals.

The officials spoke on condition of anonymity because the negotiations are private.

The maneuvering comes as the White House and majority Democrats intensify efforts to agree on a final measure, possibly before Obama delivers his State of the Union address late this month or early in February.

Government intervention into the insurance market is one of the most contentious issues to be settled. Others include the fate of a Senate-passed tax on high-cost insurance plans, bitterly opposed by some labor unions; the extent to which abortions could be covered by insurance to be sold in the new exchanges; and the amount of money available to help lower-income families purchase coverage.

Liberals long have pressed to include a government-run insurance option in the legislation, arguing it would create competition for private companies and place a brake on costs.

House Democrats included it in their legislation. In the Senate, it drew opposition from Democratic moderates whose votes are essential to the bill's fate. Even attempts to include an expansion of Medicare for uninsured individuals as young as age 55 — widely viewed as a face-saving proposal for liberals — had to be jettisoned.

Given the opposition in the Senate, Pelosi, D-Calif., signaled late last year she did not view a public option as a requirement for a final compromise. Asked in an interview Dec. 16 whether she could support legislation without it, she said, "It depends what else is in the bill."

More recently, she listed her goals for a House-Senate compromise without mentioning the provision she long has backed.

"We are optimistic that there is much that we have in common in both of our bills and that we will resolve or reconcile this legislation in a way that is a triple A rating: affordability for the middle class, accountability for the insurance companies, and accessibility to many more people in our country to quality, affordable health care," she said.

While Obama favors a government option, he has said repeatedly it is only a small part of his overall effort to remake the health care system, and is not essential.

Pelosi and Senate Majority Leader Harry Reid, D-Nev., have expressed optimism about chances for a swift agreement, but there appears to be relatively little maneuvering room. That is particularly true in the Senate, where 60 votes will be needed to overcome a Republican filibuster, and any change carries the risk of alienating a Democrat whose vote is crucial.

The bill's future is further complicated by a scheduled Jan. 19 election in Massachusetts. Some polls show Democrat Martha Coakley in a closer-than-expected race against Republican Scott Brown and an independent contender. The winner will replace Sen. Paul Kirk, who became the 60th member of the Democratic caucus when he was named to his seat as successor to the late Sen. Edward M. Kennedy.

A Republican upset would deprive Democrats of their 60th vote.

Some House Democrats say the proposed government insurance option remains alive, although they speak publicly of its possible demise as long as insurance companies aren't let off the hook.

California Rep. Xavier Becerra, who's on the leadership team, said House members would only be willing to abandon the public plan if they were certain the final bill achieves the goals they want, as Pelosi described.

"We're willing to give up what's good for America as long as we get something good back," he said.

Rep. Chris Van Hollen of Maryland, also a member of the leadership, agreed.

"I think the House is very much of a view that before they'd consider dropping the public option" they have to be assured of a bill that achieves the goals they wanted the public option to meet.

But officials said little if any time has been spent in White House meetings on the issue, and there was scant discussion of it during a conference call for members of the Democratic rank and file earlier this week.


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  • by Wow Location: Greenville on Jan 12, 2010 at 01:03 PM
    There's a really simple solution to this problem, but it's not one I expect to see happen anytime soon in this country. Give every single citizen of the U.S. Medicare, which will cover 100% of all basic health care needs and drastically regulate the cost of prescription drugs so people can actually afford them. The program would be funded by taxpayers, who would spend far less $ than they currently do on private insurance premiums. If you want to buy private insurance you can, and it will pay for elective stuff or to see private doctors. If you come to the hospital and you are an illegal alien, you get treated and then a van waits to deport you. Seriously tighten border security to prevent them from getting back in. But this plan is too damaging to the insurance companies and they have the $ and the politicians in their pockets, they even have the teabaggers and somehow many Christians rooting in their favor even though they don't know why. (money = influence)
  • by To: Pe-lose-i on Jan 11, 2010 at 03:26 PM
    I can't stand you. I wish you would resign. What scares me is if the P and V-P both died tonight, you would be the president. Canada is looking like a nice place to live right now ...
  • by James Location: New Bern on Jan 11, 2010 at 12:27 PM
    This is where antitrust laws come into effect. When I saw get the government out of it all... I don't mean insurance companies do not need regulation. But you can beat a good horse to death. We need protections as American citizens, from the government, to protect us from crooked companies... but there are limits to how far reaching they should be. I think the government is hurting more than helping at the current time. Remember Blockbuster used to have a monopoly on movie rentals, until other movie rental companies opened shop. Now with Netflix, you have unlimited rentals, no fees, all for a low monthly rate. There was a doctor in the news a while back charging customers a flat $ 75/mth fee. Unlimited visits, covered all costs to the patient... the government MADE HIM STOP it. Competition will 99% of the time prevail.
  • by ace Location: plymouth on Jan 11, 2010 at 10:26 AM
    The insurance companies need to be included in the anit-trust laws. Right now rates are set based on what the companies deside (What the market will support) not on performance and moral standards. Last year the CEO of Blue Cross Blue Shield defended his outragous salary as only .5% of the company gross. Premiums have tripled so does his salery triple. It is wrong when companies can set down as a group and deside as a group how much they will charge. With this in mind no one has a reason to shop for the best deal. How much do you think gas would cost if all the gas companies got together and desided what they would charge?
  • by qwerty Location: wilson on Jan 10, 2010 at 04:09 PM
    James-Thank you for that, it's an excellent example of how the system works, but I'm sure barlow and lavon will protest it or something. They are part of the 4 that eats for free, and still says they are exploited.
  • by Tim Location: Kitty Hawk on Jan 10, 2010 at 03:20 PM
    Don't you guys know you're too stupid to know what is best for you and to make decisions for yourself? That is why there can be no open debate for anything important like health care, cap and trade, and immigration. We're lucky we have these progressives that are looking out for us. (note sarcasm)
  • by James Location: New Bern on Jan 10, 2010 at 03:09 PM
    contd ending... It's unfair that he got seven times more than me!" "That's true!" shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the 10th and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short! And that boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.
  • by James Location: New Bern on Jan 10, 2010 at 03:08 PM
    cont. How could they divvy up the $20 windfall so that everyone would get his fair share? The six men realized that $20 divided by six is $3.33. But if they ubtracted that from everybody's share, then the fifth man and the sixth man would end up being paid to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. So the first five men paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, and ninth paid $12, leaving the 10th man with a bill of $52 instead of his earlier $59. Each of the six was better off than before, and the first five continued to eat free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the 10th, "But he got $7!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.
  • by James Location: New Bern on Jan 10, 2010 at 03:07 PM
    A little off topic, but a good read.... The truth about tax cuts in terms everyone can understand. Suppose that every day, 10 men go out for dinner. The bill for all 10 comes to $100. If they paid their bill the way we pay out taxes, it would go something like this: The first four men- the poorest- would pay nothing, the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18. The tenth man - the richest- would pay $59. That's what they decided to do. The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reducethe cost of your daily meal by $20." So now the dinner for the 10 only cost $80. The group still wanted to pay their bill the same way we pay our taxes. So the first four men were unaffected. They would still eat free. But what about the other six - the paying customers? continued...
  • by qwerty Location: wilson on Jan 10, 2010 at 12:44 PM
    lavon-the dem propaganda machine is the one who put that out, Americans aren't stupid, we do know what we want, it's our unloved president and the corrupted people in the congress who are out of touch. S-do you librels want some cheese with your whine?
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