Government insurance option isn't quietly fading away

WASHINGTON — Fears about high costs of the health care overhaul and mistrust of insurers are rekindling interest in letting the government sell health insurance as part of the plan.

The leading congressional proposal as of Wednesday — a Senate Finance bill that relies on private coverage with no new government plan — could price out some 17 million Americans. And the insurance industry may have unwittingly helped the case for public coverage with a report over the weekend asserting the Finance bill would raise premiums for everyone.

Business groups and conservatives remain steadfastly opposed to government insurance — formidable political opposition that shows no sign of weakening. So advocates are getting creative, trying to reformulate the "public option" in a way that can gain the 60 votes needed to clear the Senate.

Instead of an all-or-nothing approach, they're trying to provide choices.

What if each state could decide whether to offer public coverage instead of having it decreed from Washington — as proposed by Sen. Tom Carper, D-Del.?

What if states had a menu of options, from nonprofit co-ops to using their own employee health plans?

What if public coverage were offered only as a backstop in areas where one insurer has a lock on the market?

"We are all talking together, trying to find something that not everyone will love but the entire (Democratic) caucus will come to agreement on," said Sen. Chuck Schumer, D-N.Y., who for months has been seeking a politically viable compromise. "It's going to be something flexible, but not weak."

The lone Republican to back health care overhaul legislation, Maine Sen. Olympia Snowe, has suggested a possible way out: allowing a public plan to kick in if competition among health insurance companies under a revamped system fails to bring down costs. Snowe is opposed to government insurance as a first-line solution.

What if Snowe's idea is combined with Carper's state-by-state approach?

"Those are all elements that one could easily fashion into an outcome that would seem to be elegant," said economist Len Nichols of the New America Foundation. "It would show the left: 'Look we will be there when we're needed if coverage is not affordable.' And it would show the right that this not some backdoor government takeover, because we're only going where we're needed, either if the states decide or if conditions are such that competition is needed."