Harry Reid Says Senate Bill Will Have Public Plan

On key issues, groups that once staked out positions far apart are inching toward compromise. The AFL-CIO said Monday it might accept a tax on high-value insurance plans if the tax didn't hit the middle class.

Still, the final shape of the bill remains in doubt, and Republicans swiftly condemned the Reid plan. Mr. Reid was staking his credibility and clout as a party leader in calling for a version of government-run insurance that is close to what liberals have sought.

Under the Nevada Democrat's proposal, the "public plan" would be in force around the country, except in states that opted not to participate. They would have to make that choice by 2014.

Most Republicans in Congress oppose the idea, as do insurance companies. They say it will usher in government control of the health-care system.

Republicans say they will filibuster the Senate motion to proceed to health-overhaul legislation. Assuming all Republicans join the filibuster attempt, Mr. Reid will need all 58 Democrats and two independents to overcome the filibuster and bring the bill to full debate on the floor. He predicted Democrats will pull together.

"I believe there's a strong consensus to move forward in this direction," he said.

Some moderate Democrats have been wary of the public option and would prefer weaker versions of it -- such as one that would require states to opt in.

White House press secretary Robert Gibbs welcomed the majority leader's overture, saying President Barack Obama "is pleased at the progress that Congress has made."

Underscoring the fight ahead, Senate Minority Whip Jon Kyl (R., Ariz.) said the proposal -- even if it allows states to opt out -- still inserts the government too deeply into the private sector. "No matter what you call it or how you dress it up, the Democrats' proposal is government-run insurance," he said.

Health insurers, who have been among the most vocal opponents of public insurance, said Monday they would continue to fight the idea. "A new government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality," said Karen Ignagni, president of America's Health Insurance Plans, the main industry trade group. "The divisive debate about a government-run plan is a roadblock to reform."

The drive for health legislation is coming down to one essential question: whether Mr. Reid can get 60 votes in the Senate.

The broader legislation would remake one-sixth of the U.S. economy and extend coverage to tens of millions Americans. It would create new tax subsidies to help low and middle-income families purchase insurance and expand Medicaid, the health program for the poor. It would also create a new national exchange, where individuals and families could purchase insurance, and would mandate that nearly every American hold coverage.

Mr. Reid, the majority leader, is facing a tough re-election battle in his home state of Nevada and is under fierce pressure from grass-roots activists on the left not to give up on public option. In Washington, the fate of the Obama presidency's top domestic priority is largely in the Senate's hands.

Gone are the days when a majority leader can easily dictate the schedule and pace of debate on the Senate floor. Mr. Reid is instead left to prod and pull, and he seems intent on relying on building consensus among Democrats to carry the issue forward.

His move leaves Maine Sen. Olympia Snowe, the lone Republican to back the legislation in the Finance Committee, on the outside of the issue. She said she was "deeply disappointed" with his decision, and stressed her support for a government plan that would serve as a fallback option, if other provisions of the bill don't expand insurance as planned.

Mr. Reid said he hoped Sen. Snowe would come around.

Partly in deference to Sen. Snowe, the Finance Committee voted down the public option twice in late September.

Since then, support has picked up, for several reasons. Insurance companies came out strongly against the Finance Committee bill, and Democrats felt less of a need to nod to their concerns. The nonpartisan Congressional Budget Office questioned whether many people would sign up for nonprofit insurance co-operatives proposed in the Finance bill as an alternative to a public plan.

Mr. Reid is pointing toward floor debate in November, perhaps the second week of the month. People familiar with his plan said the government-run program would be required to negotiate payment rates directly with doctors and other health-care providers, and would not use payments based on Medicare's low rates. The Senate legislation is also expected to pare back a proposed tax on high-value health insurance plans, further shielding middle-class families from the levy.

AFL-CIO President Richard Trumka said Monday he would be open to a bill that would tax high-value health insurance plans, so long as it wouldn't affect middle-class Americans. Until now, labor has opposed a tax on health plans, citing fears the expense will be passed on to union members who've forgone higher wages in return for richer health-care packages. Just two weeks ago, labor published full-page ads in major newspapers about their opposition to this prospect. The shift comes as labor is winning on another of its big priorities, the introduction of a public plan.