Sen. Reid's plan is to pay physicians under the public option at Medicare rate. Some doctors have already shunned Medicare patients as they claim Medicare reimbursements do not cover cost, see http://money.cnn.com/2009/10/27/news/economy/healthcare_medicare_doctors/index.htm
http://www.nytimes.com/2009/10/27/health/policy/27health.html
By ROBERT PEAR and DAVID M. HERSZENHORN
Published: October 26, 2009
WASHINGTON — The Senate majority leader, Harry Reid, sided with his party’s liberals on Monday and announced that he would include a government-run insurance plan in health care legislation that he plans to take to the Senate floor within a few weeks.
His proposal came with an escape hatch: A state could refuse to participate in the public insurance plan by adopting a law to opt out. Even so, the announcement was a turning point in the debate over how much of a role government should play in an overhauled health care system, and it set the stage for a test of Democratic party unity.
With Republicans united for now in opposition to any bill including a public option, Mr. Reid needs support from all members of his caucus — 58 Democrats and two independents — to take up the legislation. Aides said Monday that he appeared to be short of that goal, lacking firm commitments from several members of the caucus.
Should Mr. Reid prevail, both houses of Congress would be poised to act on bills including a government-run plan to compete with private insurers in selling health coverage to consumers. The House is still weighing the details of its approach, but Democratic leaders have made clear they will include a government plan in their version of the bill.
Just weeks ago, the prospects for such an approach seemed remote, reflecting all-out opposition from conservatives to what they considered an excessive government role in the economy and a lack of enthusiasm from many moderate Democrats. But the idea has consistently drawn strong support in national polls, and it has backing from President Obama, though he has not insisted on it.
“The best way to move forward is to include a public option with the opt-out provision for states,” said Mr. Reid, Democrat of Nevada. “I believe that a public option can achieve the goal of bringing meaningful reform to our broken system.”
Mr. Reid’s decision was acclaimed by liberal organizations like MoveOn, Families USA and Health Care for America Now, a coalition that includes labor unions and civil rights groups.
But Mr. Reid lost the one Republican who had given Democratic efforts a tinge of bipartisanship, Senator Olympia J. Snowe of Maine. She has proposed a different approach, in which a government plan would become available only if states did not make progress in reducing insurance premiums and covering more of their residents.
“I am deeply disappointed with the majority leader’s decision to include a public option as the focus of the legislation,” Ms. Snowe said. “I still believe that a fallback, safety-net plan, to be triggered and available immediately in states where insurance companies fail to offer plans that meet the standards of affordability, could have been the road toward achieving a broader bipartisan consensus in the Senate.”
Mr. Reid and his aides provided few details of his proposal. They said the public plan would be national in scope and would be available on the first day that major provisions of the health care legislation take effect, in 2013.
The government plan would negotiate payment rates with doctors, hospitals and other health care providers. Some liberal Democrats, including the House speaker, Nancy Pelosi, have said payments should be pegged to Medicare rates, which could save money for the government and for consumers.
The debate over the public option has highlighted a divide among Democrats. The Senate health committee included a public plan in the bill it approved in July. The Senate Finance Committee rejected two versions of the public plan before approving its bill this month.
Those who voted against the public plan on the finance panel included three Democratic senators: Max Baucus of Montana, the committee chairman, and two centrists, Kent Conrad of North Dakota and Blanche Lincoln of Arkansas. Mr. Baucus had said he was open to a public option but did not think it could get 60 votes in the Senate.
As an alternative to a government-run plan, Mr. Conrad has proposed insurance cooperatives: essentially nonprofit, member-run groups, offering coverage to individuals and small groups. Proponents say they could save money by negotiating discounts with health care providers; the Congressional Budget Office sees no significant savings.
Mr. Reid said his plan would include co-ops, as well as the government plan. States that opt out of the public plan could not offer co-ops, an aide to Mr. Reid said.
Liberals see the public option as essential to the success of the legislation, saying it would foster competition and thus help drive down premium costs. With his action on Monday, Mr. Reid showed liberals he was doing all he could to achieve their goal. If his effort falters, he could propose other variations of a public plan, like one with the trigger mechanism Ms. Snowe proposed.
Mr. Reid, who faces a stiff challenge in his re-election bid, said he knew Ms. Snowe “does not like a public option of any kind,” and he held out hope that she would ultimately support the bill.
Pressed on whether he had the needed votes, Mr. Reid said, “I believe we clearly will have the support of my caucus to move to this bill and start legislating.”
A Democrat on Capitol Hill who backs the public option said “there is a lot of concern” that Mr. Reid had made his decision without nailing down the votes to prevail on the Senate floor.
The White House press secretary, Robert Gibbs, said President Obama was pleased with Mr. Reid’s decision. “He supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition,” Mr. Gibbs said.
Republicans and insurance companies assailed the decision. “No matter what you call it or how you dress it up, the Democrats’ proposal is government-run insurance,” said Senator Jon Kyl of Arizona, the No. 2 Republican in the Senate.
Liberal senators have urged Mr. Reid to include the public option in the bill he is putting together, working with versions approved by two Senate panels.
At a town-hall-style meeting in Colorado in August, Mr. Obama complained that people on the left and the right had become “fixated” on the public plan, which he described as “just one sliver” of efforts to overhaul the health care system.
For the moment, Senate Democratic leaders are taking an aggressive approach, defying Republicans and brushing aside the objections of moderate Democrats who are apprehensive about a public plan. “All the national polls show a wide majority of Americans support the public option,” Mr. Reid said.
But Mr. Reid’s decision will not be the last word. The Senate will probably spend weeks on the health care bill and could vote on dozens of amendments, including several to alter or eliminate his version of a public plan. At any stage, 60 votes could be required.
