Reid backs public option with opt out for individual states.

[The Romulan Republic]

They're talking about this on CNN right now. Apologies if its been posted already, but I didn't see it anywhere. Link and article included below:

http://www.bloomberg.com/apps/news?pid= ... ZzDTXBzHXk

Reid to Back Public Option, Letting States Opt Out (Update2)
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By James Rowley



Oct. 26 (Bloomberg) -- Senate Democratic Leader Harry Reid will announce his support for establishing a government-run health-insurance program that would allow individual states to opt out of the plan, a Democratic aide said today.

Reid’s move gives new momentum to the so-called public option as Congress considers the biggest changes to the U.S. medical-care system since it created Medicare, the health program for the elderly, in 1965.

The government-run plan, which would compete with private insurers, is among the most divisive issues in the health-care legislation. It has drawn opposition from every Senate Republican and some Democrats in the chamber.

Reid will make his announcement about including the provision in the legislation at a news conference scheduled for 3:15 p.m. Washington time, said the aide, who requested anonymity.

Reid has been canvassing 60 Senate Democrats as he combines health legislation that was passed by two committees. Democratic lawmakers said last week the Nevada Democrat was leaning toward including the public option insurance plan that would give states the power to opt out.

Snowe Opposed

Reid’s decision may end any chance that the legislation will get the Republican backing sought by President Barack Obama and Democrats such as Finance Committee Chairman Max Baucus.

Maine Senator Olympia Snowe, the only Republican who has shown a willingness to work with Democrats to craft legislation, said last week she would vote against allowing Democrats to bring legislation with a public option to the floor. Snowe favors triggering the plan only if the private insurance market fails to lower premiums after a certain period of time.

Julia Wanzco, Snowe’s press secretary, said the senator had no immediate comment today about Reid’s decision.

House Speaker Nancy Pelosi, who has championed the public option in legislation being drafted in her chamber, told reporters Oct. 23 that she “didn’t think there’s much problem” with allowing states to opt out of the government-run insurance plan.

Reid needs 60 Senate votes to prevent Republicans from blocking consideration of legislation. Virtually all Republicans oppose the measures passed by two Senate committees.

Open to Ideas

Louisiana Democrat Mary Landrieu, an opponent of the public option, signaled in a statement after meeting with Reid that she was open to a compromise.

In her statement, Landrieu said she was “encouraged that the conversations” among “senators who back different versions of a public option could potentially lead to a compromise.”

The idea of a public option to compete with private insurers such as Indianapolis-based WellPoint Inc. has been the most contentious issue. Republicans and some Democrats say it would undermine the market; supporters say it’s the best way to bring costs down.

Nebraska Democrat Ben Nelson was noncommittal when questioned about the proposal yesterday on CNN’S “State of the Union.”

‘Not Excited’

“I certainly am not excited about a public option where states would opt out,” Nelson said, saying he prefers a plan “where states can opt in if they make the decision themselves.”

Nelson said he would make his decision whether to vote to let the legislation be considered once he has seen a specific proposal.

New York Democrat Charles Schumer, a member of Reid’s leadership team who supports government-run health insurance, said on NBC’s “Meet the Press” yesterday that “liberals” in the Democratic caucus would “like it stronger, but they are willing to live with” the opt-out provision. Among moderate Senate Democrats “there are some who actually like it,” said Schumer, who added that Reid was close to 60 votes needed to ensure passage.

Senate Democrats, meanwhile, aren’t likely to include a mandate that all employers offer insurance to workers or pay a penalty, according to a person familiar with the negotiations. Instead, companies with 50 or more employees would be subject to penalties if they don’t provide coverage and have workers who buy their own policies through taxpayer-funded subsidies.

Multiplying the Penalty

The penalties would be as high as $750 multiplied by the number of full-time workers at a company, the person said. This differs from a plan adopted last month by the Senate Finance Committee, which had penalties of as much as $400 per worker.

The Senate measure would also include a mandate that all Americans have health coverage, and face penalties if they don’t, the person said.

In the House, the question has been how to structure the public option, not whether to include one. Pelosi has pushed for what she calls the most “robust” version, a plan that would peg its provider reimbursements to 5 percent above the rates paid by Medicare, the government program for the elderly.

That’s a nonstarter with Senate Democrats including North Dakota’s Kent Conrad, who says those rates are too low and would bankrupt hospitals in his state.

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net and Laura Litvan in Washington at +1- llitvan@bloomberg.net

Last Updated: October 26, 2009 14:45 EDT

Not sure what to make of this myself. Not a perfect solution, but better than no public option at all, surely?

[The Romulan Republic]

Edit: I'm concerned that my thread title inadvertently plagiarized the title of the article, don't know if its a problem but if it is can a mod please edit it?

[Galvatron]

Does this mean the ruggedly individualist red states can decide not to use it?

[Broomstick]

My state is usually considered red, but we've already got a sort of "public option" plan that my family is on - even a lot of red states would opt for public option. I suspect the opt outs would be deep south, ultra conservatives.

[Kodiak]

Does this mean the ruggedly individualist red states can decide not to use it?

I wonder how long states could operate without a public option when the citizens can see their neighbors across state lines w/ cheaper AND better health plans. It seems it would lead to rioting in the streets.

[Rye]

Won't that overburden the socialist states with poor people flocking to them for treatment? That will kill sane healthcare in the crib; it'll be a field day for all the "rationing" articles, showing that socialised healthcare is spread too thin, inherently can't deal with reality, and politicians will need to come up with red tape to stop it happening. At which point, they'll be "bureaucrat death panels" set up to kill people from one state but not others, they'll be proof that the socialist dream is untenable, and they'll no doubt be commies picking on people from more capitalist states.

Absolutely absurd, and xmas come early for the republicans if it happened. All they have to do to win is resist long enough.

[Galvatron]

What if we beat them at own their game and simply demand proof of residency in the states where they're seeking non-emergency public healthcare? After all, they're already demanding provisions that would prohibit illegal immigrants from getting it. Out-of-staters would simply fall under the same category of ineligible recipients.

[The Duchess of Zeon]

Won't that overburden the socialist states with poor people flocking to them for treatment? That will kill sane healthcare in the crib; it'll be a field day for all the "rationing" articles, showing that socialised healthcare is spread too thin, inherently can't deal with reality, and politicians will need to come up with red tape to stop it happening. At which point, they'll be "bureaucrat death panels" set up to kill people from one state but not others, they'll be proof that the socialist dream is untenable, and they'll no doubt be commies picking on people from more capitalist states.

Absolutely absurd, and xmas come early for the republicans if it happened. All they have to do to win is resist long enough.

No, because the states just administer the programme, the federal government FUNDS it. When this happens, it just means that the federal government will allocate more funding to the states with a public option.

In the US today, the most conservative, right-wing states receive the most in benefit money for socialist services in the US from the federal government, as a net drain on the budget, and the progressive states are a net positive on the budget, putting more into socialist services than they take out. What would happen when this plan is implemented is that the balance would be reestalished, money would be taken from the conservative states to pay for the healthcare services in the progressive states, through allocation of federal taxation monies, meaning that people in conservative states will be paying for the healthcare of their poorer citizens who move to other states to receive it, and the balance between red states and blue states in monies into the social services will finally be equalized.

This is actually a democratic masterstroke, and the Republicans are bending and taking it up the ass out of their blind fear of socialist medicine.

[CmdrWilkens]

I don't think, Marina, that it will work that way. Say what you will about Republicans but for all they hemmed and hawed about Medicare every state opted in. No politician at the local level who is forced to chose between "let my folks get healthcare" and "fuck the public" will chose the later because he (or she) doesn't have access to the money to paper over the vote during the next cycle. The option is a next winner just about everywhere and as it starts spreading I expect that pressure on the states to stay in (and the default position is IN) will be overwhelming. Oh sure one or two might opt out but I expect them to be in the minority.

[Guardsman Bass]

I don't think, Marina, that it will work that way. Say what you will about Republicans but for all they hemmed and hawed about Medicare every state opted in. No politician at the local level who is forced to chose between "let my folks get healthcare" and "fuck the public" will chose the later because he (or she) doesn't have access to the money to paper over the vote during the next cycle. The option is a next winner just about everywhere and as it starts spreading I expect that pressure on the states to stay in (and the default position is IN) will be overwhelming. Oh sure one or two might opt out but I expect them to be in the minority.

Nitpick, but you mean "Medicaid", right? Medicare is a wholly federal program in the US.

Won't that overburden the socialist states with poor people flocking to them for treatment? That will kill sane healthcare in the crib; it'll be a field day for all the "rationing" articles, showing that socialised healthcare is spread too thin, inherently can't deal with reality, and politicians will need to come up with red tape to stop it happening. At which point, they'll be "bureaucrat death panels" set up to kill people from one state but not others, they'll be proof that the socialist dream is untenable, and they'll no doubt be commies picking on people from more capitalist states.

They can do things like residency requirements and so forth to prevent out-of-state people from getting access to a state's public insurance coverage.

EDIT: Damn, missed Galvatron's post. But yeah, there are ways they can limit out-of-state access to the plans. They're not perfect (someone on the border could try and fake residency, or list a relative and/or friend in the state as their residence), but it would deter all but the most determined folks.

[CmdrWilkens]

I don't think, Marina, that it will work that way. Say what you will about Republicans but for all they hemmed and hawed about Medicare every state opted in. No politician at the local level who is forced to chose between "let my folks get healthcare" and "fuck the public" will chose the later because he (or she) doesn't have access to the money to paper over the vote during the next cycle. The option is a next winner just about everywhere and as it starts spreading I expect that pressure on the states to stay in (and the default position is IN) will be overwhelming. Oh sure one or two might opt out but I expect them to be in the minority.

Nitpick, but you mean "Medicaid", right? Medicare is a wholly federal program in the US.

Yeah my bad on that one.