Pelosi chooses compromise approach to public option in reform bill

A health care reform bill set to be unveiled this morning will include a government-run public option for health insurance that will negotiate rates with insurers, much like private insurers operate.

The Washington Post: House Speaker Nancy Pelosi will release a health-care reform bill today that includes a public option and "a historic expansion of Medicaid." But legislative sticking points regarding abortion and immigration remain unresolved. "Senior Democratic House aides said the bill would likely include a version of the 'public option' preferred by moderates and may raise Medicaid eligibility levels to 150 percent of the federal poverty level for all adults, a steeper increase than in earlier drafts." The bill will cost just under $900 billion over 10 years without increasing the deficit for at least 20, House Democrats said. A plan that would have tied the public option to Medicare rates lacked the votes needed to secure its passage (Murray, 10/29).

The Hill: "The negotiated rates plan is estimated to cost about $85 billion more than the Medicare-based reimbursements. … The Congressional Progressive Caucus vehemently pushed the Medicare-based public option, saying it was the best and cheapest way to expand coverage and lower costs. Most of its members support a full single-payer plan, and felt they'd compromised enough with the 'robust' option. Many centrist and rural Democrats say hospitals and physicians in their districts are already underpaid by Medicare" (Allen and Soraghan, 10/28).

The New York Times reports that the bill would cover an additional 35 million to 36 million people and includes a surtax on high-income earners — those making $1 million as a married couple or $500,000 on individuals, equal to three-tenths of one percent of all households (Pear, 10/28).

The Wall Street Journal reports that the plan to raise Medicaid eligibility for the poor could keep costs down because it would be cheaper for the government to insure them than to give subsidies to allow people to purchase private insurance themselves. "The Medicaid expansion is likely to prompt protests from the states, who share the program's costs with the federal government" (Vaughan and Bendavid, 10/29).

The Los Angeles Times: "The House bill also will include a complex mechanism for limiting the use of taxpayer subsidies for abortion services: Insurance companies that offer abortion coverage would be required to segregate funds received from consumers from subsidies provided by the federal government" (Levey and Hook, 10/29).

CongressDaily reports that it's not a sure thing that all Democrats will even support the bill. "Rural House Democrats could also revolt if a House agreement to address geographic disparities in Medicare rates is not included in the conference report. The agreement calls for an Institute of Medicine Study to report within 18 months on the geographical disparities in healthcare costs and quality" (Hunt and House, 10/29).

The Associated Press reports that the bill would require everyone to sign up by 2013 for insurance through their employer, a government program or a purchasing pool called an exchange. No Republicans are expected to vote for the legislation. "One change expected to be revealed Thursday is that some of the benefits in the bill, which mostly were set to take effect in 2013, have been moved up so that Americans would see the benefits of the legislation more quickly, according to Pelosi spokesman Nadeam Elshami" (Werner, 10/29).

In the meantime, Pelosi is moving to secure votes and playing hardball, even with members of her own caucus, Politico reports. "Pelosi can lose at least 38 Democrats on the bill she's introducing Thursday and still tally a win. But the 'no' votes are already stacking up — a mix of freshmen in GOP-leaning seats, fiscal conservatives and even more senior members skittish about an anti-Democratic wave come 2010" (O'Connor, 10/29).

Politico has a second story about how most liberals can live with — for now — the compromises Pelosi is suggesting because the Senate side has a public option in their bill also. "In the end, liberal Democrats felt Pelosi and her leadership team did everything possible to push for the strongest possible public plan, both because the speaker favors it — especially since it saved about $85 billion more from the final cost of the bill — and because it would bolster her hand in negotiations with the Senate" (O'Connor, 10/29).

But Roll Call reports that the plan has liberals waving the white flag of surrender. "Rep. Lynn Woolsey (D-Calif.), co-chairwoman of the Congressional Progressive Caucus, cautioned that her group has made no decisions about whether to support the more moderate approach pending a look at legislative language. But she echoed many others in her ranks when she signaled liberals are ready to claim victory on dragging the plan back from the dead and accept a compromise" (Newmyer and Dennis, 10/29).

Finally, The Hill reports in a second story that a widely-reported whip count was wrong that said the so-called "robust" public option that tied rates to Medicare lacked the votes to pass in the House. House Majority Whip James Clyburn, D-S.C., said Wednesday: "Sources indicated that the numbers on the list are accurate or close to accurate, but that some lawmakers' positions are listed incorrectly" (Soraghan, 10/28).