Senate Finance Committee Rejects Public Option for Health Insurance

The Senate Finance Committee voted 15 to 8 Tuesday against a measure by Sen. Jay Rockefeller (D-W.V.) that would have added a public insurance option to the committee's health care reform bill. Republicans, as well as five moderate Democrats worried about the cost of the measure and its effect on the bill's chances of passage in the Senate, combined to defeat the amendment.

The committe later voted down a similar, but more market-driven measure from Sen. Chuck Schumer (D-N.Y.) 13 to 10.

After nearly five hours of debate, Rockefeller made a final plea before his measure came up for consideration, calling senators' votes on the public option a moral and ethical decision.

"It's not a fair system," he said. "The people are on the short end of the stick and the insurance companies are making all the money."

Earlier this month, Sen. Max Baucus of Montana emerged from weeks of closed-door meetings with the "Gang of Six" negotiators with a bill that replaced the public option with non-profit co-ops for consumers. The loudest critic of the plan was Rockefeller, the committee's second-in-command.

Rockefeller called his amendment a free-market solution "that Adam Smith would have cooked up himself." He excoriated insurance companies as "rapacious," saying they "are getting away with banditry," and added, "Who comes first, the insurance companies or the American people?"

Specifically, the Rockefeller amendment would have created a publicly administered insurance option by 2013. Because reimbursement rates would be tagged to Medicare rates, Rockefeller estimated that his plan would save the federal government $50 billion and result in more choice and competition in the insurance industry.

Republicans on the committee argued the proposal would add to the deficit, short-change doctors, run insurance companies out of business and force people who now have private insurance into a government-run plan.

Baucus, the committee chairman, said he believed that adding a public option to the current insurance landscape could lower costs, but said including it in his bill would jeopardize the chances of passing heath care reform through Congress. "I can count," he said. "And no one has shown me how to get to 60 votes with the public option in the bill."

All 10 Republicans on the committee, including Sen. Olympia Snowe of Maine, voted against the Rockefeller amendment, as did moderate Democrats Tom Carper of Delaware, Kent Conrad of North Dakota, Blanche Lincoln of Arkansas, Bill Nelson of Florida and Baucus. "My first job is to get this bill across the finish line," Baucus concluded.

Following the vote, the committee moved on to consider an amendment by Sen. Chuck Schumer (D-NY), which would also add a public insurance option, but would not tie reimbursement rates to Medicare rates. See Jill Lawrence's break-down of all of the public option amendments, as well as Sen. Olympia Snowe'a proposal for a "trigger" mechanism for a public option, HERE.

Amendments to add the public option can still be offered on the Senate floor when health care reform comes to the full Senate, but the lop-sided tally of the committee's vote makes passage by the full Senate with a 60-vote majority unlikely. The chambers are now on track to pass significantly different versions of health care reform bills that will have to be fashioned together in a conference committee later this fall.