Senate Democrats Mull State 'Opt Out' Public Health Option as Compromise

Senate Democrats focused Thursday on a potential compromise on a government-run "public'' health insurance option that would create a national plan but let states opt out if they chose.

The compromise, designed to resolve one of the most contentious issues in a broad healthcare overhaul, would create a national public insurance option to compete with insurers but allow states to choose an alternative or not participate.

Senate Democratic leader Harry Reid, who met with President Barack Obama at the White House, explored the level of support for the idea among Democrats. Senators said the proposal was gaining momentum but no decisions had been made.

"This is moving more in a direction that has compromise written across it,'' Senator Kent Conrad told reporters about the "opt-out'' proposal broached by Senator Charles Schumer.

The idea emerged as a strong contender after a series of late-night, closed-door talks led by Reid designed to merge two healthcare reform bills in the Senate.

A healthcare overhaul that reins in costs, regulates insurers and expands coverage is the top domestic priority for Obama, but it has been slowed by battles over its cost, size and the government-run plan to compete with insurers.

Only one of the two Senate plans includes a government-run health insurance option that is backed by Obama and liberals as a way to create more choice for consumers. Critics say it would be a government takeover that would hurt private industry.

HOUSE TO INCLUDE PUBLIC OPTION

Democratic leaders in the House of Representatives are negotiating to merge three healthcare reform bills into one, but all three include a government-run insurance option.

House Democrats are close to agreement on a version of the option favored by liberals that ties reimbursement rates to healthcare providers to Medicare, the health program for seniors.

The fate of the public option is much less certain in the Senate, where support for it is weaker and several moderate Democrats who are critical to passing a final bill have voiced doubts.

Some of those Democrats said they still had reservations about any national government-administered insurance plan, even if states were not forced to participate.

Senator Ben Nelson said he was not comfortable with the ''opt-out'' compromise. "The only one that appeals to me at all is one that would be state-based -- not federal,'' Nelson told reporters.

"There isn't anything necessarily on the table,'' he said. ''There is a lot of discussion about some things.''

Senator Olympia Snowe, the only Republican to support any of the five healthcare bills passed by congressional committees, said she could not support any government-run public option, including the compromise plan.

"I would be opposed to it,'' said Snowe, who has been courted by Democrats for months.

Democratic Senator Mark Pryor, another moderate who has wavered on the issue, said he was undecided but "I'm open to the public option. It depends on how it's structured.''