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Senate health bill will embrace 'public option'

HEALTH care legislation heading for the Senate floor would give millions of Americans the option of purchasing government-run insurance coverage, Majority Leader Harry Reid announced yesterday.

Reid said individual states would have the choice of opting out of the program. He stopped short of claiming the 60 votes needed to pass a plan steeped in controversy.

His announcement was cheered by liberal lawmakers, greeted less effusively by the White House and noted with a noncommittal response by Democratic moderates whose votes will be pivotal. Republicans have denounced the public option as a "government takeover" of health care.

President Barack Obama, meanwhile, said yesterday that America must overhaul the health care system to make insurance cheaper for families, businesses and the government. Obama did not mention the Senate action, but he said a health care overhaul is closer than ever.

He predicted success, but warned that major industries such as insurance companies will fight hard to prevent it. Obama made the remarks at a pair of Democratic Party fundraisers in Miami.

"It's going to get harder," the president told about 200 people who paid US$500 each to greet him at a reception. "Now's the time when all the special interests are saying, 'Oh, this is really going to happen, we might lose some of our profits.' And they start paying big lobbyists, and they start twisting arms."

Reid said, "While the public option is not a silver bullet, I believe it's an important way to ensure competition and to level the playing field for patients with the insurance industry."

Sen. Olympia Snowe, the only Republican to vote with Democrats on health care so far this year, issued a statement saying she was "deeply disappointed" in the approach the Democratic leader had chosen.

Changes on the public option - and numerous other provisions in the measure - are possible during a debate expected to last for weeks.

And officials said Reid had prepared several variations of key provisions so he could make adjustments in his bill at the last minute and still make sure he was within Obama's target of a US$900 billion price tag over a decade.

Both the House of Representatives and Senate are struggling to complete work by year's end on legislation extending coverage to millions who lack it, to ban insurance industry practices such as denying coverage because of pre-existing medical conditions and to slow the rise in medical costs nationally.

As in the Senate, attempts to complete drafting a measure in the House have been delayed by internal Democratic divisions on the details of a government-run option. Differences in bills passed by the House and Senate would have to be reconciled before any legislation reaches Obama's desk.

In deference to moderates, Reid also said he was including a provision for nonprofit co-ops to sell insurance in competition with private companies.

Senate Democratic officials say the bill Reid envisions would require most individuals to purchase insurance, with exemptions for those unable to find affordable coverage. Large businesses would not be required to provide insurance to their workers, but would face penalties of as much as US$750 per employee if any qualified for federal subsidies to afford coverage on their own.

The bill will also include a tax on high-cost insurance policies, despite opposition from organized labor, officials said. In a gesture to critics of the plan, Reid decided to apply the new tax to family plans with total premiums of at least US$23,000 a year. The Senate Finance Committee approved a tax beginning at US$21,000 in total premiums.

The White House released a statement saying Obama was "pleased that the Senate has decided to include a public option for health coverage, in this case with an allowance for states to opt out."

Obama has long voiced support for such a plan but has also signaled it is not a requirement for a health care bill he would sign.


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