Humana (TG:HUM)
Historical Stock Chart

From Nov 2019 to Nov 2024

U.S. Senate Majority Leader Harry Reid, (D, Nev.), said Monday that health-care legislation that comes before the Senate will have a government-run health insurance option which states can choose not to carry.

Reid told reporters that, under the legislation, states would have until 2014 to choose to "opt out" of the public plan. The move casts doubt over whether Reid will be able to attract any Republican support for the bill and whether it will have 60 votes needed to avoid a filibuster.

Reid cast aside questions of whether he will have 60 votes for the bill's passage, but suggested that he would have support among Democrats for a procedural motion allowing the Senate to proceed to the bill.

"I believe we clearly will have the support of [the Democratic caucus] to move to the bill and start legislating," Reid said.

Reid has led talks on health-care legislation between he, Senate Finance Chairman Max Baucus, (D, Mont.), Senate Banking Chairman Christopher Dodd, (D, Ct.), and White House officials. While there are 60 Democrats in the Senate, Reid has faced the challenge of crafting a compromise on the bill that can attract support from both liberals and moderates within his party.

Sen. Olympia Snowe, (R, Maine), who is considered a key swing vote on the bill, has signaled that she would not support a public option with a state "opt-out" provision, though she supported a health-care bill approved by the Senate Finance Committee. The Finance Committee bill didn't include a public health insurance option, but rather would a network of health-care "co-operatives."

In a statement, Snowe said she "deeply disappointed" that Reid would include a public health insurance plan in the bill. Snowe has argued for a public plan "trigger" that would spur the creation of public plans on a state-by-state basis only if private insurers did not provide affordable coverage to a large enough proportion of a given state's population.

"I still believe that a fallback, safety net plan, to be triggered and available immediately in states where insurance companies fail to offer plans that meet the standards of affordability, could have been the road toward achieving a broader bipartisan consensus in the Senate," Snowe said in a statement.

Reid said that he hopes Snowe "will come back."

"I'm very disappointed that this one issue, the public option, has been something that's frightened her," Reid said.

In a statement, White House spokesman Robert Gibbs said President Barack Obama is "pleased" that the bill will include a public option.

"Thanks to their efforts, we're closer than we've ever been to solving this decades-old problem," Gibbs said. "And while much work remains, the President is pleased ... at the progress that Congress has made."

Senate Minority Leader Mitch McConnell, (R, Ky.), in a statement Monday, criticized the yet-unseen bill, saying that the "core of the proposal is a bill that the American public clearly does not like, and doesn't support."

Liberal lawmakers and groups cheered Reid's announcement. Sen. Jay Rockefeller, (D, WV.), who has argued forcefully in favor of a public plan, in a statement said he is "gratified to see the public option debate is alive and well in the Senate."

Gerald McEntee, who heads the American Federation of State, County and Municipal Employees (AFSCME), said the bill is "by no means perfect," but a "significant improvement over the proposal crafted in the Senate Finance Committee.

Health insurers have fought against a public plan and, in recent weeks, ramped up their criticism of leading health-care proposals before Congress. Karen Ignagni, president and chief executive of the America's Health Insurance Plans (AHIP) trade group, said in a statement Monday that the public plan debate is "a roadblock to reform."

"A new government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality," Ignagni said. "The American people want health care reform that will reduce costs and this plan doesn't do that." Leading insurers in AHIP include Aetna Inc. (AET), Humana Inc. (HUM), Cigna Corp. (CI) and UnitedHealth Group Inc. (UNH).

-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com

(Henry J. Pulizzi contributed to this story)