Democrats may go it alone on gov't insurance plan

[June 22, 2009]  WASHINGTON (AP) -- Emboldened by polls that show public backing for a government health insurance plan, Democrats are moving to make it a politically defining issue in the debate over the future of medical care.

Behind-the-scenes attempts to get a deal with Republicans on nonprofit co-ops as an alternative to a public plan have led only to frustration, complains a key Democrat. He and his colleagues may have to go it alone, said Sen. Chuck Schumer.

The co-ops were seen as perhaps the last hope for compromise on a contentious issue that threatens any remaining prospects of bipartisan support for President Barack Obama's sweeping plan to remake the health care system.

"I don't think I could say with a straight face that this (co-op proposal) is at all close to a nationwide public option," Schumer, D-N.Y., told The Associated Press on Sunday. "Right now, this co-op idea doesn't come close to satisfying anyone who wants a public plan."

Most Democrats want the final health care bill to include a government sponsored plan that for the first time would be open to middle-class workers and their families. It would be offered alongside private plans through a new kind of insurance purchasing pool called an exchange. Individuals and small businesses would be able to buy coverage through exchanges, but eventually businesses of any size might be able to join.

Proponents say the option of a public plan in the marketplace would put a brake on costs and check the power of insurers. But Republicans, insurers and many business leaders say a government plan could drive private insurance companies out of business.

Nonetheless, two recent news media polls have found public support for a government plan, even if many people are unsure about its implications. The most recent survey, a New York Times-CBS News poll released Sunday, found that 72 percent supported the idea, including half of those who identified themselves as Republicans.

"The polling data backs up our subjective view that to make health care reform work, you need a public option," said Schumer.

Schumer's role is important because he had been acting as an intermediary between liberal Democrats and moderates who are trying to strike a deal on the issue with Republicans on the Senate Finance Committee. Of the five House and Senate committees working on health care, Finance is the only one that appears to have a chance at reaching a bipartisan agreement.

Schumer said Finance Republicans had rejected several proposals designed to beef up the suggested nonprofit insurance co-ops. These included setting up a national structure for the co-ops, $10 billion in government seed money, power to negotiate payment rates to medical providers nationwide and creation of a presidentially appointed board of directors.

Without "dramatic" changes, Schumer said he would oppose the co-ops deal and urge other Democrats to do so as well. The Finance Committee compromise could be unveiled as early as this week. Senators were forced to start again last week because initial cost estimates were well above their 10-year, $1 trillion target.

The next few weeks will be pivotal in the debate. Democrats want to push ahead as far as they can before the July 4 congressional recess. Over the break, comments from constituents could determine whether Congress sticks to its goal of passing legislation this summer.

Both sides are nervous. Some Democrats say they doubt the plan has enough Democratic support to clear the Senate.

"I think there's a lot of concern in the Democratic caucus," Sen. Dianne Feinstein, D-Calif., said Sunday on CNN's "State of the Union."

Sen. Chuck Grassley of Iowa, the top Republican on the Finance Committee, said lawmakers are rethinking their wish list, which includes coverage for all and slowing the rate of medical cost increases -- goals that may be in conflict.

"So we're in the position of dialing down some of our expectations to get the costs down so that it's affordable and, most importantly, so that it's paid for because we can't go to the point where we are now, of not paying for something when we have trillions of dollars of debt," said Grassley, also appearing on CNN.

[Associated Press; By RICARDO ALONSO-ZALDIVAR]

Associated Press writer Philip Elliott contributed to this report.

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