Panel rejects public option

WASHINGTON — Underscoring the divisions within their party, Democrats on the Senate Finance Committee on Tuesday split decisively over a central issue in the health care debate as centrists teamed with Republicans to reject creation of a public option for medical insurance.

The committee voted 15-8 against establishing a public program after a sometimes emotional debate that stretched over half a day, revealed tensions between liberal and conservative Democrats and laid bare the chasm between the political parties over how to repair the nation’s health care system.

It was the biggest setback to date for liberal Democrats but did not kill the possibility of a public insurance option being included in final legislation. Liberals argue that such a plan is needed to increase competition among insurance companies, rein in costs and guarantee affordable coverage for all Americans.

Backing an amendment by Sen. Jay Rockefeller, D-W.Va., the liberals were rebuffed by five centrist Democrats, some of whom argued that such a plan would bankrupt hospitals in rural areas while others expressed concern that it would hurt the private insurance industry that is important to their communities — and campaign treasuries.

All 10 of the panel’s Republicans also voted no.

The committee also rejected, by a 13-10 vote, a revised public plan amendment by Sen. Charles Schumer, D-N.Y., that was designed to address concerns that a public plan would have a competitive advantage over private companies. But that narrower margin, reflecting switches by two Democrats, indicated that there was room within the party to seek compromise.

“This vote will be a good test so the American people know there is significant support in this committee,” Schumer said. “This is not the first word on the public insurance option, and it won’t be the last.”

The issue figures to be revisited when the bill goes to the Senate floor and to a conference with the House, where support for a public option is strong. The Democratic defections spotlighted the kinds of reservations that will have to be addressed if the idea is to win against the odds in the Senate.

For now, Finance Committee Chairman Max Baucus, D-Mont., said that a bill with a public option would not win the 60 votes needed to cut off a potential filibuster and pass the Senate.

“My job is to put together a bill that will become law,” said Baucus, who authored the bill before the committee and voted against the public option. “I can count, and no one shows me how to get to 60 votes with a public option.”

Also opposing the Rockefeller amendment was Sen. Kent Conrad, D-N.D., chairman of the Budget Committee, who worried that the plan would devastate his state because its reimbursements would be based — at least at first — on Medicare rates that he says were unrealistically low for rural hospitals.

He favors an alternative included in the Baucus bill: funding to establish nonprofit, state-level cooperatives in which consumers could band together to purchase health insurance.

Other Democrats voting against the public option were Sen. Blanche Lincoln of Arkansas, who may face a tough re-election fight in 2010 in a conservative state; Sen. Bill Nelson of Florida, a former state insurance commissioner worried about its effect on the private insurance companies; and Sen. Tom Carper of Delaware, who shared those concerns.

Nelson and Carper were the two who switched sides and voted for the Schumer amendment.

Another committee member, Sen. Maria Cantwell, D-Wash., voted in favor of the public option.

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