Senate Panel Rejects Public Health Option

The U.S. Senate Finance Committee rejected a provision to include a government-run public insurance option as part of the effort to overhaul the health care system. The vote was 15-to-8 against the measure.

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From Congress today, a strong signal of the steep uphill battle that the public option on health insurance faces. Senators on the Finance Committee defeated attempts to add the government-run insurance option to health care legislation. That's despite the fact that it has widespread public support beyond Capitol Hill.

As NPR's David Welna reports, Republicans solidly oppose a public option and Democrats are divided.

DAVID WELNA: West Virginia Democrat Jay Rockefeller presented his plan for a public option to the Senate Finance panel with the argument that private health insurers put profits first and customers second. Big insurance companies, he said, have little competition in many parts of the country and a public option would change that.

Senator JAY ROCKEFELLER (Democrat, West Virginia): If we don't do it, what we're doing is saying, go ahead, health insurance companies, and make more profits. That's the resolve. And we're saying that somehow people and their problems, which those are the folks who elect us and they're having a lot of problems with health insurance, that they somehow don't count as much.

WELNA: Washington state Democrat Maria Cantwell pointed out that polls show broad support for a public option and rejection of a private insurance system that over the past decade has simply become unsustainable.

Senator MARIA CANTWELL (Democrat, Washington): Wages have only gone up 29 percent. The insurance premiums have gone up 120 percent. And we've seen insurance profits go up 428 percent.

WELNA: The panel's top Republican, Iowa's Chuck Grassley, would not be swayed.

Senator CHUCK GRASSLEY (Republican, Iowa): I oppose the amendment because I think it is a slow walk towards government-controlled, single-payer health care.

WELNA: New York Democrat Charles Schumer pounced on Grassley's anti-government rhetoric.

Senator CHARLES SCHUMER (Democrat, New York): I'd just like to know what you think of Medicare, a government-run program that's far more government run than what Senator Rockefeller has proposed. Do you think Medicare is a good program?

WELNA: Grassley replied he thinks Medicare is part of the nation's social fabric like Social Security.

Sen. GRASSLEY: To say that I support it is not to say that it's the best system that it can be.

Sen. SCHUMER: But it is a government-run plan, isn't that right?

Sen. GRASSLEY: It is a government-run plan.

Sen. SCHUMER: Thank you.

WELNA: But it was clear some Democrats on the panel were also balking at a public option. One of them was North Dakota's Kent Conrad.

Senator KENT CONRAD (Democrat, North Dakota): Every major hospital administrator in my state has told me, if you tie public option to Medicare levels of reimbursement, which the Rockefeller amendment does for two years, every hospital in my state, every major hospital goes broke.

WELNA: And committee chairman Max Baucus said what he needed was to produce a health care bill that could get 60 votes in the full Senate and thus avert a filibuster.

Senator MAX BAUCUS (Democrat, Montana): Now, I can count and no one has able to show me how they can count up to 60 votes with a public option in the bill. And thus I've been strained to vote against the (unintelligible).

WELNA: In the end, five committee Democrats, three from states President Obama lost last November, opposed Rockefeller's public option amendment, as did every Republican. A more market friendly version of the public option offered by New York's Schumer got two more votes from Democrats, but it too was defeated. Still, with the House planning to include a public option in its bill, Democrats are hoping the full Senate will do so as well. Many are now looking to Mr. Obama to lead their fight for a public option.

David Welna, NPR News, the Capitol.

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Senate Panel Rejects Divisive 'Public Option'

Democratic Sen. John Rockefeller of West Virginia (left) talks with Max Baucus (D-MT). i i

hide captionDemocratic Sen. John Rockefeller of West Virginia (left) talks with Senate Finance Committee Chairman Max Baucus (D-MT) before the panel's vote Tuesday in Washington, D.C.

Win McNamee/Getty Images
Democratic Sen. John Rockefeller of West Virginia (left) talks with Max Baucus (D-MT).

Democratic Sen. John Rockefeller of West Virginia (left) talks with Senate Finance Committee Chairman Max Baucus (D-MT) before the panel's vote Tuesday in Washington, D.C.

Win McNamee/Getty Images

The Senate Finance Committee on Tuesday voted down two attempts by liberal Democrats to include a government-run insurance option as part of its legislation overhauling the nation's health care system.

Chairman Max Baucus (D-MT) joined more conservative Democrats and all the Republicans on the committee to defeat measures by Sens. Jay Rockefeller of West Virginia and Chuck Schumer of New York.

"My job is to put together a bill that gets to 60 votes" in the full Senate, Baucus said before voting against Rockefeller's amendment, which was defeated 15-8. "No one shows me how to get to 60 votes with a public option." It takes 60 votes to overcome delaying actions that Republicans could attempt on the Senate floor.

The Senate Finance plan by Baucus is now the only health care bill pending in Congress that does not have a public insurance plan, which Obama and other backers say would boost competition and control costs.

Republicans were elated by the amendments' defeat. They had argued private insurers would be forced out of business and millions of people would have to get their insurance from the government.

The public option is "nothing more than a Trojan horse for a single-payer system in Washington," said Utah Sen. Orrin Hatch.

Earlier in the day, Rockefeller accused insurers of giving profits priority over consumers and maintained that a government-backed plan is the best way to rein in health care costs.

"We need this option because the insurance companies have failed to meet their obligation" to the public, he said.

Rockefeller's proposal was patterned after Medicare, the government program that insures the elderly. Under the plan, payments to doctors, hospitals and other medical providers would be based on the fees that Medicare pays.

Schumer's amendment, which was defeated 13-10, favored a system in which the government would negotiate payment rates with providers.

Baucus omitted the controversial public option from his bill, saying any legislation that included it would never pass the Senate. Baucus' bill provides for "co-ops" that he says would provide choice and competition.

A compromise on the issue could come from Republican ranks. Aides to Maine Sen. Olympia Snowe have said she is considering using the public option as a trigger, which would go into effect only if private insurers fail to keep premiums in check after a reasonable period of time.

Baucus has come under fire from liberal Democrats, who accuse him of being from lukewarm to hostile on the government-backed plan.

Two liberal groups, Democracy for America and the Progressive Change Campaign Committee, say Baucus is too cozy with insurance and health care interests that have contributed to his campaigns and oppose the public option.

The groups are launching a TV and Internet ad that features a young father from Montana who is in need of a heart operation, uninsured and deeply in debt. In the ad, Bing Perrine, 26, looks straight into the camera and asks Baucus, "Whose side are you on?"

In an interview, Perrine said the public option "is the only true way we can keep it fair." The insurance industry has said it couldn't compete with the price-setting power of government.

Baucus aide Tyler Matsdorf said the ad falsely implies that Baucus doesn't care about the plight of people with pre-existing health problems. He said Baucus' plan would address such problems but in a way that differs from what liberals want.

For example, the plan would bar private insurers from denying coverage for pre-existing health problems and create nonprofit co-ops to compete with the insurance industry. Matsdorf said this would achieve the same result public-plan supporters are seeking and "prevent [Perrine's] situation from ever happening again."

Such arguments don't seem to hold much sway with liberals.

Another group, Health Care for America Now, is circulating a Sept. 23 letter to Baucus from local Democratic Party leaders in Montana that has raised more questions from the left about the senator's position on the public plan. The letter summarizes an August telephone call between Baucus and the Democratic leaders, and quotes the senator as saying, "I want a public option, too."

"We need you to say the same thing in Washington," the local Democrats wrote.

Matsdorf said the senator included a government option in his original health care blueprint issued last November but has since realized that a public plan doesn't have enough support to clear the Senate.

"Health care reform isn't just about what Sen. Baucus wants," Matsdorf said. "It is about crafting a bill that can get 60 votes in the Senate."

From NPR staff and wire reports

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