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Bid to Revive Public Option Fails in Senate Committee

September 29, 2009 at 12:00 AM EST
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In the latest showdown over health care, the Senate Finance Committee voted Tuesday to reject a proposal to add a public insurance option to a reform bill. Betty Ann Bowser reports.
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JIM LEHRER: The debate over a government-run health plan reached a critical point today. Several Senate Democrats tried to add the public option to a reform bill being readied for the Senate floor.

NewsHour health correspondent Betty Ann Bowser has our lead story report.

SEN. MAX BAUCUS, D-Mont.: Going to be an interesting week, guys and gals. The committee will come to order.

BETTY ANN BOWSER, NewsHour correspondent: Today’s much anticipated debate in the Senate Finance Committee focused on one of the most contentious issues in health care reform. A government-run insurance option to compete with private insurers is a primary goal for liberal Democrats, but has so far received a lukewarm reception from party moderates and no support at all from Republicans.

SEN. MAX BAUCUS: My larger goal is to enact health care reform. I want the strongest bill that I can possibly get.

BETTY ANN BOWSER: Finance Committee Chair Max Baucus pointedly left the public option out of his proposal, but today two fellow Democratic senators tried to revive it with amendments.

SEN. JAY ROCKEFELLER, D-W.Va.: And I hope very much that it will be considered for what it is, and that is practical and important.

BETTY ANN BOWSER: First, West Virginia’s Senator Jay Rockefeller argued a public plan as part of a new consumer exchange is the best way to rein in rapidly escalating health care costs over the next decade.

SEN. JAY ROCKEFELLER: It’s voluntary. It would simply guarantee that there is at least one health insurance plan in the exchange, like everybody else, that ordinary Americans can afford and can count on to have more moderate premiums and yet the same benefits, or perhaps more. We’ll see. It’s stable. It’s affordable. I believe it saves $50 billion.

BETTY ANN BOWSER: But Utah Republican Orrin Hatch warned a public option would only make health care more expensive.

SEN. ORRIN HATCH, R-Utah: I thought the goal of health reform was to actually make it more affordable. Now, let me make a very important point. Now, I believe this: A new government plan is nothing more than a Trojan horse for a single-payer system in Washington. Washington-run programs undermine market-based competition through their ability to impose price controls and shift costs to other purchasers.

Proponents of this government plan seem to count on the efficiency of the federal government in delivering care for American families since it is already doing such a great job with our banking and automobile industries.

The public option push

Sen. Jay Rockefeller
(D) West Virginia
Who comes first, the insurance companies or the American people?

BETTY ANN BOWSER: But Utah Republican Orrin Hatch warned a public option would only make health care more expensive.

SEN. ORRIN HATCH, R-Utah: I thought the goal of health reform was to actually make it more affordable. Now, let me make a very important point. Now, I believe this: A new government plan is nothing more than a Trojan horse for a single-payer system in Washington. Washington-run programs undermine market-based competition through their ability to impose price controls and shift costs to other purchasers.

Proponents of this government plan seem to count on the efficiency of the federal government in delivering care for American families since it is already doing such a great job with our banking and automobile industries.

BETTY ANN BOWSER: Senator Rockefeller also complained the bill offered by Chairman Baucus would give private insurance companies nearly $500 billion in subsidies which low-income workers would use to buy coverage.

SEN. JAY ROCKEFELLER: It's a subject that I think ought to make all of us very angry, as I think it ought to make us very angry that, in the face of all of this, we're giving them over a $500 billion more subsidies. I don't understand that. I really don't understand that. Who comes first, the insurance companies or the American people?

BETTY ANN BOWSER: Baucus, in turn, argued his bill -- known as the chairman's mark -- does hold insurance companies accountable.

SEN. MAX BAUCUS: You make some very good points. I mean, and I agree with the intent of your amendment, which is to hold the insurance industry's feet to the fire. However, I think it's important to kind of set the record straight, because some of the questions sort of leave the implication that the mark is easy on the insurance industry, and it is not.

Gauging 'the temperature'

Sen. Orrin Hatch
(R) Utah
A new government plan is nothing more than a Trojan horse for a single-payer system in Washington.

BETTY ANN BOWSER: Still, Rockefeller's proposal found support from some fellow Democrats, like New Jersey's Robert Menendez.

SEN. ROBERT MENENDEZ, D-N.J.: We're not talking about an entitlement in a public option. We are simply talking about a self-sustaining, independent, self-financed entity, and that is fundamentally different.

So it's good to talk about Medicare being a publicly run insurance provision for those who qualify because of their age and other conditions, but the bottom line is, that's far different than this. This is not a entitlement and therefore a mandate.

SEN. MAX BAUCUS: The clerk will call the roll.

BETTY ANN BOWSER: But in the end, the Rockefeller amendment failed 15-8, with Baucus and 4 other Democrats joining all 10 Republicans on the committee.

Supporters of the public plan will have another chance to bring the issue up, and that's when the Senate's health care reform bill moves to the floor for debate sometime in the next month. Meanwhile, supporters say, if today's proceedings did one thing, it gauged the temperature on where everybody stands.

As if to underscore that point, New York Democrat Charles Schumer offered a second public option amendment in the committee today.

SEN. CHUCK SCHUMER, D-N.Y.: There's no question that the public option would improve this good bill.

SEN. MAX BAUCUS: OK. The clerk will call the roll.

BETTY ANN BOWSER: Schumer's amendment also failed, 13-10. And overall, the outcome demonstrated how tough it's going to be for the public plan to prevail in the larger Senate debate.

Instead, the Baucus bill does call for establishing non-profit insurance cooperatives, run by consumers, to compete with private insurers. Still uncertain is a so-called trigger proposal that could be offered by Maine Republican Olympia Snowe. It would put private insurers on notice to lower premiums or face imposition of a government-run plan down the road.

JIM LEHRER: You can learn more about how a public option would work and what it might mean for insurance companies on our Web site, newshour.pbs.org.