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Senate Deal Attempts to Strike Compromise on Public Option

The health care debate reached a potential turning point in the Senate on Wednesday after leaders reached a compromise that drops the so-called "public option" from the bill. Gwen Ifill talks to experts about the politics and policy of the move.

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    The health care debate in the U.S. Senate achieved a potential turning point today. Democratic leaders reached agreement last night on dropping the so-called public option from the bill.

    NewsHour health correspondent Betty Ann Bowser begins our coverage.


    President Obama today praised Democrats for trying to resolve a key stumbling block, even though their deal would drop something he's championed: a government-run insurance option.


    The Senate made critical progress last night with a creative new framework that I believe will help pave the way for final passage and a historic achievement on behalf of the American people. I support this effort, especially since it's aimed at increasing choice and competition and lowering costs.

  • SEN. HARRY REID, D-Nev.:

    Thanks, everyone, for being patient and waiting for us.


    News of the deal came late last night from Senate Majority Leader Harry Reid, after nearly a week of closed-door negotiations involving 10 moderate and liberal Democrats.


    We have a broad agreement. Now, I know that people are going to ask, give me every detail of this.


    In fact, Reid offered few details. But it was widely reported the deal would replace the Senate bill's government-run option with a system of private nonprofit health plans. They would be administered by the Office of Personnel Management, which already manages health policies for federal employees, including members of Congress.

    The proposal would also expand Medicare to uninsured Americans 55 to 64 years old. The program is now open to those 65 and older.


    This is a consensus that will help ensure the American people win in a couple of different ways. One, insurance companies will certainly have more competition. And, two, the American people will certainly have more choices.


    And, Democratic aides said, if private insurers won't participate, some form of a public option could yet kick in.

    Reid still has a lot of work to do to get the 60 votes he needs to pass the bill. First, he has to keep liberals in line who are disappointed with losing the public option. Then he has to appease fiscal conservatives in his party, who are worried about the cost, nearly a trillion dollars.

    Meanwhile, all eyes are on the Congressional Budget Office. The CBO will have to calculate the cost of the newly revised measure. And Wisconsin Democrat Senator Russ Feingold, a leading liberal, said he has serious concerns.


    I am interested in seeing what the Congressional Budget Office numbers are. For example, the public option, under the majority leader's bill, saved $25 billion. Are we going to lose those savings? I think that's an example of the kind of question I would like to have answered before I feel confident that this will work.


    Fellow Democrat Blanche Lincoln of Arkansas, a fiscal conservative, said, while she favors parts of the new proposal, she, too, is waiting to see more details.


    I think that creates a great arena where we're going to see good, quality health care offered at the most reasonable cost.

    There are lot of things on the table still, and, you know, until we hear back from CBO, it's going to be hard to see whatever I can support for sure.


    Republicans lined up against the latest Democratic plan, especially the expansion of Medicare.

  • Minority Leader Mitch McConnell:


    We all know Medicare is going broke now in seven years. They're going to take $460 billion out of it, not to make it more sustainable, but to start a new program for a whole different set of Americans. And now they want to expand coverage even further. It hardly makes any sense to me.


    Meanwhile, groups representing doctors and hospitals who have backed reform in general also questioned the wisdom of expanding Medicare.

    Rich Umbdenstock is president of the American hospital association.

    RICH UMBDENSTOCK, president, American Hospital Association: The ability of people under 65 to buy into Medicare certainly helps on the coverage side, but it greatly concerns hospitals on the revenue side, because Medicare chronically underpays hospitals.

    Our latest data shows that Medicare pays 91 cents on the dollar of costs. So, this is moving more people into a program that underpays hospitals, it really compromises hospitals' ability to continue the level of services they want to provide, need to provide.


    Majority Leader Reid hoped to quiet the doubts and stay on schedule for getting the Senate to vote on the final bill by Christmas.


    Major questions remain about whether this latest deal will get health care reform passed.

    Joining us to look a little more closely at the policy and the politics are Amy Walter, editor of the National Journal's political daily, The Hotline, Jacob Hacker, a professor of political science at Yale University and one of the leading proponents of the public option, and Matt Miller, an author, columnist and fellow at the Center For American Progress.

    Welcome to you all.

    Jacob Hacker, how real is this broad compromise, a term that Harry Reid used?

  • JACOB HACKER, Yale University:

    Well it certainly is a broad compromise, but I think it's a complex one. It has a lot of moving parts and a lot of details we don't know yet.

    The way I would describe it is, in sort of Dickinson terms, is it's a tale of two public options. Public option one, the public option that was going to be within the exchange and available to Americans on day one to create competition for private insurance plans to give people a choice, that public option has been replaced, in my mind, with an inadequate substitute, a national system of private plans.

    But public option two, which was never on the agenda before, a buy-in to the actual Medicare program for 55- to 64-year-olds, is an enormous positive development. It's actually the original idea, if you will, for the public option, simply letting people get into the Medicare program that provides broad, secure coverage at an affordable price.


    So, the original public option is not necessarily alive, but this new one might be, you think?


    Yes. I mean, what I would say is that this is a very interesting turn in the debate.

    All of the discussion up until now was figuring out ways to hobble this public option that would be available on a broad scale. This new development in the debate basically takes the national public option that would have been available to all Americans within the exchange and replaces it with nonprofit plans that I don't think are going to be able to provide the choice and competition that President Obama spoke about.

    But the new development is that we also have in this package a Medicare buy-in for 55- to 64-year-olds.


    Matt Miller, what do you think about that? Whatever happened to the robust public option we were talking about before? Is this a desirable outcome?

  • MATT MILLER, Center For American Progress:

    I think it is, because I think that the whole focus on the public option has been overblown, in my view, in the debate. I think the left has put too much emphasis on it as a kind of panacea. And I think the right has demonized it in a way that's totally unjustified, because all the estimates have shown it would only reach a couple million people out of 300 million Americans.

    The real progressive achievement that I think liberals and Democrats should embrace that this deal represents progress to is that, for the first time, individuals in America will have access to group health coverage outside the employment setting. That's the big thing that America uniquely lacks that every other advanced country has.

    And if you combine that with the ability for a ban on insurers from discriminating against folks with preexisting conditions, with the prevention of anyone ever from going bankrupt from medical costs in America, again, a shameful thing in a wealthy country like the United States, this political molecule that Harry Reid has worked to craft would represent the biggest progressive achievement in decades.

    And while the public option debate is important, I think it's a bit of a sideshow compared to those core achievements that liberals should cherish.


    OK, political molecule, that term — that takes us right to you, Amy. Very nice segue.

    So, what — does he get even one more vote out of this new plan?

    AMY WALTER, editor in chief, The Hotline: Well, it's all been — and I think you're exactly right. We have been talking about — a lot about terminology. And I think that, whatever we call this final bill, and whatever's in this final package, they're going to call — whatever they would like to call it, mostly, they would like to call it done.

    And I think that's the most important piece here when you look at this. The choke point has always been getting these 60 votes. And so we knew that there was always going to be the deal-making that needed to happen to get something done. Whether we were going to call it a public option, whether we were going to call it something else, we knew that to craft something it was going to have to get those 60 votes.

    And the concept of a public option, because I think it has been so demonized, especially for moderates who are worried about their reelection or worried about being called out as being overly involved — getting the government overly involved in health care, worried about those things, they don't want to vote for something with a public option.


    But you just saw the wait and see that came from all of the Democrats we have been watching most closely, the ones who have been saying they don't know. Was there something for them in this?


    It sounds like at least that they are saying that they're at least open to the prospect, to have a Mary Landrieu and a Ben Nelson and a Blanche Lincoln out there saying, this opens up the process to me. I'm still willing to take a look and see.

    But, remember, all of them are going to hold this close to their vest, one, because they all know that they're the 60th vote. So, why do you want to give away the store right now? You have all the cards. Make sure you learn how to play them very well. There's a reason that they have been doing that quite well.

    The other piece and I — that I think is really important is, the longer this stays out, and the longer that we're all sitting around talking about the sausage-making, the more frustrated Americans become in this whole process, both with Congress and with the bill.

    And when you look at where the president's approval rating is right now in the handling of health care, it's actually — this was a Bloomberg poll that came out today — it's actually dropped seven points since September, in terms of his handling, his approval on this issue. So, whatever is going on, I think that the number-one issue for the minority — for the majority leader, Harry Reid, is to really get this thing done.


    Jacob Hacker, let's talk about the Medicare part you like so much. Is it going to cost a lot of money, and won't that lose votes?


    Well, no. I mean, it's going to be a stand-alone Medicare buy-in. So, that means it would be self-financing. And the people who are paying premiums to buy into Medicare would be fully funding their coverage.

    That actually raises a bit of a technical concern, is just, how to you ensure that it's — that coverage is affordable? There are two parts to what's being discussed. And we don't know all the details yet.

    The first part is actually to allow people to buy into Medicare prior to the creation of these exchanges in 2011, so, prior to the creation of the exchanges in 2014. I think that's an enormously positive development. It's something that is concrete, that people will be able to see it changing lives very early in the reform process.


    You were on Capitol Hill today talking to people about this. Did anyone say — did people say to you, great, this is done?


    No. I can tell you that no one feels like it's done. There's still a long way to go.

    There is a sense, I think, that, you know, we're nearing the end of this final stage of the debate, but we're still a very long way to go.


    The end of the beginning, no doubt.

    Matt Miller, the other thing that happened this week was the passage — in the Senate, anyhow — or the defeat in the Senate of this anti-abortion amendment that had been embraced in the House. Leaving aside for a moment whether the House will suddenly change its mind about this issue, was this significant, or was this symbolic, what the Senate did?


    I guess I think that the politics of the abortion issue, as it relates to this debate, again, in my view, is a real sideshow, because we already — through the federal government's tax subsidy for employer-provided health care, most of those employer-provided programs give women discretion to use it for services that they seek in their own best judgment.

    That means that the federal government is already devoting hundreds of billions of dollars a year to subsidizing programs that now we're seeing a big fuss on Capitol Hill as to whether a penny of this money for these new subsidies can be segregated somehow in ways that don't let women use it for the purposes they intend.

    So, I guess I view this as a — this is not what the debate should be about. And whatever they need to do to sort of sweep it away is good for the country.


    Which takes us back to the politics of it. Is it an essential part political of the part of this debate, Amy?


    Well, what's interesting, I think, already, in the House, though, you saw that the pro-choice faction in the House was willing to compromise on this, basically to say, we are going to vote for a bill that has restrictive language on it on abortion, knowing that the deal that we're going to cut is, though, when it comes back to us, it will be stripped out, and the same — so, when the Senate passed one that was more liberal, that really sent a signal that we're going to get what we asked for.

    But bottom line is, the compromises that need to be made are going to be made individually, and the votes taken on individual amendments are going to find their way — surprise, surprise — into campaign commercials next time.

    So, regardless how these members vote on the final bill, how they're voting all the way along is also going to be taken into the equation in their reelection efforts, and the way that they're going to try to paint themselves as being advocates on this issue.

    All Democrats, I think, I would believe, want to get this thing done, because they do know that having a majority and not passing this, to come this far and to get nothing accomplished, would be the worst possible thing for them. But they have to show each of these individual members, and more so in the Senate, that they have played a role in tailoring this to the needs of their states.


    Let's go back to the public option, Jacob Hacker, because one of the things that Olympia Snowe, the famously moderate Republican, asked for a long time ago in this debate was a trigger, something that, if for some reason people were not able to get coverage, the government option would be triggered to take it to fill that gap.




    This seems to be part of this compromise.


    That's right, though the details, again, are not entirely clear. It look as if the trigger in this proposal is that if this new complicated way of the federal government contracting with private plans to provide national private plans that are regulated at the federal level, if that doesn't work, then you would fall back to some kind of public option.

    But even that is not entirely clear. And I think, actually — and Matt wrote a very good column about this — that I actually think that bringing the trigger back on to the agenda would be a very important way to create more heat for the insurance industry.

    After all, we're going to be giving a huge amount in subsidies, requiring people to get private insurance coverage. But we don't have strong guarantees that private insurance premiums are going to be in line going forward.


    So, the existence of the trigger would force them to…


    Right, the threat that there would be something more robust than this proposed private insurance alternative that's on the table right now.

    So, I'm strongly of the view that the way to strengthen this would be to say, look, OK, Office of Personnel — and I just say and just want to say the insurance companies clearly think that this was a big win for them. There was an insurance industry insider who just wrote on a blog, "We win, administered by private insurance companies, no government funding."

    Well, if they have won this round, the question is, can we put in place a trigger that says, if they don't perform up to expectations, then, in the next round, there's a public option that isn't restricted to people over the — over 55?


    Matt, are they right, the private insurances companies, that they won on this round, defining it the way they did?


    I think they — there's no question the private insurers prefer to not have the fully robust public option.

    But I agree with Jacob that there needs to be something in the system that's a forcing device, not just for the insurers, but for the local regional oligopolies among hospitals, among physician groups. The real drivers that people don't understand of health care costs isn't just the insurance companies. It's the regional market power of the provider groups that no politician wants to take on and no one really wants to talk about.

    It's been sort of the missing aspect of the cost debate that we will be dealing with for years.


    Is there time pressure on Harry Reid at this point as we move along?

    If feels we talk about breakthroughs every couple of weeks, and then we're back here.


    That's right. Right.

    I mean, and in the piece, it was set up that he wants to get this done by Christmas.




    There's talk that of course you want the president to be able to sign this before the State of the Union, and then we move on and get to talk about, oh, I don't know, what, the economy maybe, unemployment, those things. The Senate is literally tied up in knots.

    You see the House right now saying, we don't care what the Senate's doing. We know we have got to talk about jobs and unemployment. So, that's what we're going to do.

    They want to be able to move on to other topics. And, as I said, every day that this is out here, it's not just the president's numbers on this issue dropped, that the support for the issue continues to drop. Right now, again, proposed changes to the health care system — this is in the Bloomberg poll — only 38 say that they approve of what they're hearing right now about what's going on in health care.

    The longer it sits out here, the less popular it becomes. And Harry Reid himself up for reelection, new poll came out this week, not only are his numbers bad in the state, but just his handling of health care…


    This particular issue.


    … this particular issue, not good either. So, I would definitely want to get this done, if I were in his shoes.


    Amy Walter, Jacob Hacker, and Matt Miller, thank you all very much.