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Public Option Nixed in New Compromise

December 9th, 2009 – Last night Senator Harry Reid announced that a group of 5 liberal and 5 moderate Democratic Senators reached a compromise in which the controversial public plan option would be abandoned.

Replacing the public plan option would be a new national plan administered by the government’s Office of Personnel Management, but run by nonprofit entities set up by the private sector.  The new national plan would be available to the public through the new state run insurance exchanges that would be created under the bill.

The plan’s cost must be calculated by the nonpartisan Congressional Budget Office, but if the numbers work this should be enough to gain traction with moderate Democrats and perhaps gain the 60 votes needed to pass. While any Senate Bill will still need to be reconciled with the Congressional Bill, it is expected that the Senate bill will make up the core of the final bill as the final reconciled Bill must still pass through Congress and the Senate before it is signed into law. Passage in the Senate is much more difficult than in the strongly Democratic Congress.

Additionally, the proposed new bill opens up Medicare to Americans ages 55 to 64. People in the 55-to-64 group who already get health insurance through their employers would continue to do so under the proposal. The new younger Medicare enrollees would have to pay more for their Medicare coverage that current enrollees, but this would give them another option for coverage.

Senator John Barrasso, a Republican from Wyoming said that expanding Medicare “is putting more people in a boat that’s already sinking.” The American Medical Association strongly opposes any expansion of Medicare due to their declining compensation through the program and a developing shortage of doctors that will accept Medicare in some areas.

The proposed legislation also bar insurers from engaging in a range of practices, such as denying coverage because of pre-existing conditions. The biggest roadblock that remains right now is the polarizing issue over tightening coverage for abortions or not.

Senator Reid hopes to test the legislation on the floor next week to see if he has the 60 votes needed to pass the bill.

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