WASHINGTON – The Senate majority leader, Harry Reid, announced Monday that he would include a government-run insurance plan in the major health care legislation that he plans to take to the Senate floor within a few weeks, but he proposed that states be allowed to “opt out” of the public plan.
Mr. Reid’s decision, made after two weeks of deliberations and under intense pressure by his party’s liberals, assures that a public insurance option will be included in bills brought to the floor in both houses of Congress.
“The best way to move forward is to include a public option with the opt-out provision for states,” Mr. Reid, of Nevada, said at a news conference. “I believe that a public option can achieve the goal of bringing meaningful reform to our broken system.
It is not clear that Mr. Reid has the 60 votes he would need just to bring the bill to the Senate floor if it includes the public insurance plan. Senate aides said Monday that Mr. Reid was several votes short of that goal.
And with his latest move, he lost the one Republican who had given the Democratic efforts a hint of bipartisanship, Senator Olympia J. Snowe of Maine, who had supported the Senate Finance Committee’s version of the bill, which did not include a public plan.
“I am deeply disappointed with the majority leader’s decision to include a public option as the focus of the legislation,” Ms. Snowe said in a statement, and she said that Mr. Reid had missed a chance to keep her on board.
“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,” Ms. Snowe said.
But Mr. Reid instantly achieved one of his goals, as his decision was acclaimed by liberal organizations like MoveOn, Families USA and Health Care for America Now, a coalition that includes labor unions and civil rights groups.
Such praise was expected to lift his political prospects back home in Nevada where he is up for re-election next year.
Pressed on whether Senate Democrats would unite to advance the bill, Mr. Reid said he believed they would. “I believe we clearly will have the support of my caucus to move to this bill and start legislating,” he said.
A Democrat on Capitol Hill who supports the public option said “there is a lot of concern” that Mr. Reid had made his decision without having nailed down the votes to get the bill approved on the Senate floor.
The White House press secretary, Robert Gibbs, said President Obama was pleased with Mr. Reid’s decision. “He supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition,” Mr. Gibbs said of the president.
Republicans and insurance companies assailed the decision. “No matter what you call it or how you dress it up, the Democrats’ proposal is government-run insurance,” said Senator Jon Kyl of Arizona, the No. 2 Republican.
Liberal senators have urged Mr. Reid to include the public insurance plan in the bill that he has been putting together, working with versions approved by two Senate committees.
Mr. Reid’s aides provided few details about how the opt-out provision would work. They said that the public plan would be national in scope and that it would be available on the first day that the major provisions of the health care legislation go into effect, which is now expected to be July. 1, 2013.
The government plan would be required to negotiate payment rates with doctors, hospitals and other providers. Some liberal Democrats have pressed for a public plan using rates tied to Medicare, which could generate more costs savings for the government and for consumers.
Mr. Reid said that he was submitting a number of proposals related to the health care legislation to the Congressional Budget Office for cost analysis. Senators in both parties have demanded to see a full cost estimate before being asked to vote on bringing the bill to the floor.
For the moment, Senate Democratic leaders are taking an aggressive approach, defying Republicans and ignoring the concerns of moderate Democrats who are apprehensive about a public plan.
But Mr. Reid’s decision will not be the last word. The Senate will probably spend weeks on the health care bill and could vote on dozens of amendments, including several to alter or eliminate his version of a public plan.
In the House, Speaker Nancy Pelosi faces a slightly different challenge. She says she is certain that the House will pass a health care bill with a public plan. The only question, she says, is what form it will take. On that question, House Democrats are split.
The Senate and House bills would require most Americans to carry health insurance. Supporters of a public plan say it would hold down costs by forcing competition with private insurers, which, under the legislation, could get 20 million to 30 million new customers.
Opponents say the public plan would have unfair advantages and could eventually drive private insurers from the market.
Without a public option, said Senator Richard J. Durbin of Illinois, the Democratic whip, “health insurance companies have virtually no restrictions on what they can charge us.”
Christina D. Romer, chairwoman of the president’s Council of Economic Advisers, weighed in to the debate Monday, supporting creation of a public plan.
“A public health insurance option would be a credible entrant in concentrated markets, and would serve as a competitive, alternative choice, constraining the ability of insurers to raise premiums, and thus containing the growth rate of costs,” Ms. Romer said.
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