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Senate Committee Rejects Public Option for Health Overhaul
By Patrick Yoest, The Wall Street Journal - September 29, 2009
 Getty Images
Sen. Jay Rockefeller (left) talks with Sen. Max Baucus before the start of the Finance Committee markup of its health-care bill on Tuesday.
WASHINGTON—The Senate Finance Committee rejected amendments Tuesday that would add a government-run health-insurance plan to the committee's health-care legislation, but debate over whether to adopt a public plan isn't expected to end at the committee.
By a 15-8 vote, the committee rejected an amendment sponsored by Sen. Jay Rockefeller (D., W.Va.), that would create a public health-insurance option. Under Mr. Rockefeller's amendment, a government-run plan would inherit Medicare's network of doctors and hospitals and pay them based on Medicare payment rates for its first two years.
All Republicans on the panel voted against Mr. Rockefeller's amendment, in addition to five Democrats: Senate Finance Chairman Max Baucus of Montana, Bill Nelson of Florida, Kent Conrad of North Dakota, Blanche Lincoln of Arkansas and Thomas Carper of Delaware.
A similar amendment that would create a public plan, but that would pay doctors and hospitals at negotiated rates rather than Medicare rates, was offered by Sen. Charles Schumer (D., N.Y.). It failed by a 13-10 vote, with Messrs. Nelson and Carper voting in favor of it.
Mr. Schumer said his amendment would put the proposed public plan on a "level playing field." Many health-care providers complain that Medicare pays too little for procedures, physician and hospital visits, and equipment.
Mr. Rockefeller argued that a public option is necessary to hold costs down and provide ample competition for private insurers, which he said engaged in "banditry."
"I feel so strongly about this because it makes so much sense," Mr. Rockefeller said. "The people who I represent need this...because they're helpless in front of the insurance companies."
Democrats supporting the Rockefeller amendment pointed to several states in which only a handful of insurers--sometimes as few as two--provide insurance coverage for the majority of those covered. The public option, they said, would guarantee a low-priced plan for consumers.
Republicans lambasted the amendment as an attempt to expand the federal government's reach and eliminate private insurers. A public plan would "crowd out" private insurers with artificially low prices, eventually forcing private insurers to absorb unpaid costs within the U.S. health system and charge their policyholders higher premiums, they said.
"It is a slow walk toward government-controlled, single-payer health care," said Sen. Charles Grassley (R., Iowa).
Mr. Baucus has said a bill that contains a public option wouldn't garner 60 votes in the full Senate, which is the total needed to avoid a filibuster. He pointed to provisions in the Finance Committee's current bill that would impose new regulations on insurers, such as one that would bar insurers from excluding potential policyholders if they have a pre-existing health condition.
"It's important to explain that the bill is not easy on insurance companies," Mr. Baucus said.
While President Barack Obama has said that he would prefer that health-care legislation contain a public-health insurance plan, he has also said that he is open to other ideas that increase choice and competition.
In prepared remarks, Mr. Schumer indicated that he would offer his amendment again when the full Senate considers health-care legislation.
"It is important to continue to work with our colleagues to bring this issue to the Senate floor, and all the way to conference if we have to," Mr. Schumer said in the remarks.
The Finance Committee bill is the only version of health-care legislation considered by a House or Senate committee this year that omits the public health-insurance option. As an alternative way to increase competition, it would devote $6 billion to help start up health-insurance co-operatives, which would be nongovernment entities operating within states.
Three committees in the House have approved versions of health-care legislation that include some type of public health-insurance option, and House Speaker Nancy Pelosi (D., Calif.), has advocated for a public plan to be part of health-care legislation. The Senate Health, Education, Labor and Pensions Committee has also approved a bill that includes a public health-insurance option.
Insurers oppose a public health-insurance plan in any form. Robert Zirkelbach, a spokesman for the America's Health Insurance Plans trade group, said in a statement that a public health-insurance option "would dismantle employer coverage, bankrupt hospitals, and add to the federal deficit."
Members of AHIP include leading insurers such as Aetna Inc., Humana Inc., Cigna Corp. and UnitedHealth Group Inc.
Write to Patrick Yoest at patrick.yoest@dowjones.com
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