public optionThe Huffington Post declared the public option’s time of death as 11:12 on 12/10/09–the time of a press conference in which Nancy Pelosi signaled her willingness to entertain a bill without the provision.   If that was the technical time of death, what was the cause?

Basically, the fate of the public option has always been bound up with the rules of the Senate and the willingness of the Senate to pursue a path that did not require 60 votes.  While there are 60 votes in the Democratic caucus, several members have staked unalterable opposition to a bill that includes a government-run insurance plan—in any form.

That means that to pass a bill with a public option Democrats had to either go the route of “budget reconciliation,” which requires only a simple majority, or take the “nuclear option” and change the rules of the Senate to bypass a filibuster. (You may remember that Republicans threatened the “nuclear option” when they controlled the Senate and Democrats were blocking a number of Bush nominees to the federal court, but there’s been no real discussion of amending Senate rules to make it possible to pass health care reform.)

While reconciliation remains a technical possibility, and has all along, the clock really ran out on it during health reform’s slow walk through the Senate.  When a bill finally cleared Finance, Majority Leader Reid had, in theory, a last chance to combine the HELP and Finance bills in a way that would move via budget reconciliation.

But major technical challenges, a lengthy process, and the perceived political liabilities to doing reform with a narrower base of political support closed the door on reconciliation, and with it, any real chance that the public option would make it through the process in any recognizable form (notwithstanding the compromise version included in the bill Reid brought to the Senate floor.)

Well before a group of conservative and liberal Democrats started meeting to discuss alternatives, and a bevy of liberal bloggers began to toll its death knells, the public option had been significantly compromised from the original vision.  That vision contained two key elements: Universal availability, and Medicare-based networks, pricing and administration.

Universal availability went first, with the public option restricted to those who would purchase coverage through the exchange.  Medicare-based pricing fell in the House when many members from rural districts opposed using Medicare as basis for payment.

What survived would have had, in the short run, a modest impact on health insurance, an impact that  with potential to grow over time. Without 60 votes in the Senate or an alternative path, the question has always been more when than if it would get removed.

What’s the alternative? With the public option out, the question remains: What will take its place?  The Senate is remaining very close-mouthed about the details of the negotiated alternative pending a CBO score later this week.

Elements of the alternative appear to include creating a national network of not-for-profit health plans overseen by the Office of Personnel Management (The same office that oversees the federal employee health plan), funding for CHIP through 2015 (instead of the current 2013), stricter regulation of private insurance, e.g. requiring 90 cents of every dollar to be spent on health benefits, and reducing the Medicare eligibility age to allow younger people to buy in, perhaps starting at age 55.  A proposal to also expand Medicaid to 150 percent FPL, as the House bill does, was discussed but rejected.

Several House progressives signaled that they would be prepared to entertain a Medicare expansion as an alternative to the public option, where the idea has long been popular.

But even before the deal has become available for public inspection it has taken fire from hospitals and doctors.  One Dem and an increasingly infamous Independent who negotiated the deal have started backing away from it, leaving its fate very much in doubt.  (Ironically, the only thing that could possibly resurrect the public option is if the conservative Democrats become too intransigent, forcing Senate leadership to reconsider budget reconciliation despite its difficulties.)

The Road, and November baseball Little time remains to close a deal if the Senate intends, as it says, to complete their work before Santa’s circumnavigation.  Senate rules require a certain amount of time to elapse before the motion to halt debate can be acted on, so unless we see both the public option compromise and the Senate “Manager’s amendment” this week, it’s likely that the Christmas deadline will slip.  Once the Senate does act, there will be enormous pressure to seal a deal with the House, and fast.

There has been a lot of speculation this past week over whether Congress will bypass the conference committee process altogether, instead having the two chambers informally negotiate a small number of amendments that the House would pass and send back to the Senate for concurrence.  Failing that, leadership is seeking a very compressed conference process—Speaker Pelosi has said she thought they could do it in 48 hours.

While the pressure to wrap up is undeniable, the significant gulf between the House and Senate on financing, affordability, abortion, employer responsibility, and access for immigrants will make reaching a quick conclusion difficult.  (See our rundown of the issue gaps in last week’s Insider.)

President Obama wants health reform done before the State of the Union address and he may push the address into February to make that possible. Kind of like November baseball, but less hats.

–Michael Miller, director of strategic policy

photo courtesy of aflcio2008 on flickr