Democrats in the Senate agreed Tuesday night to drop the controversial public option plan from health care reform legislation and replaced it with a privatized program with government oversight.
The deal, however, still allows creation of a government-run program if private companies cannot deliver what Uncle Sam wants.
Senator Majority Leader Harry Reid, under fire for what many consider lackluster leadership in the health care debate and other issues, hails the deal as a “breakthrough” and says deal will “overcome a real problem” Democrats had with the on-again, off-again public option.
But the deal, hailed by Democrats, still faces opposition from Republicans and possibly some Democrats so the debate may be far from over.
Under the deal, the government plan preferred by liberals would be replaced with a program that would create several national insurance policies administered by private companies but negotiated by the Office of Personnel Management, which oversees health policies for federal workers. If private firms were unable to deliver acceptable national policies, a government plan would be created.
In addition, people as young as 55 would be permitted to buy into Medicare, the popular federal health program for retirees. And private insurance companies would face stringent new regulations, including a requirement that they spend at least 90 cents of every dollar they collect in premiums on medical services for their customers.
Mr. Reid refused to provide details. Other senators said the tentative agreement would sideline but not kill the “public option” championed by President Obama and liberal Democrats in Congress.
Under the agreement, people ages 55 to 64 could “buy in” to Medicare. And a federal agency, the Office of Personnel Management, would negotiate with insurance companies to offer national health benefit plans, similar to those offered to federal employees, including members of Congress.
If these private plans did not meet certain goals for making affordable coverage available to all Americans, Senate Democratic aides said, then the government itself would offer a new insurance plan, somewhat like the “public option” in the bill Mr. Reid unveiled three weeks ago.