The only good thing about Sen. Harry Reid's proposed health-care reform compromise is that states can opt out from federal reforms, several Utah lawmakers and health-reform advocates said Monday.

Senate Majority Leader Reid, D-Nev., announced Monday he will send a reform bill to the Senate floor for a vote that contains the controversial public insurance option and an opt-out clause for states that have designed an alternative to provide coverage for those who can't find a private plan.

Reid's proposal could well be the hybrid compromise that gives liberal members of the Senate what they want in reform and offers conservatives a way to avoid the government takeover of health care they fear, said Utahns on both sides of the debate.

Proponents of adding a new public option a la Medicare/Medicaid say it's a vital safety net for people who can't otherwise obtain insurance coverage. Opponents say having an opt-out clause is the safety valve that Utah and other states well down the road to their own reforms need to protect them from federal meddling.

Sen. Orrin Hatch, R-Utah, said he's "disappointed" by Reid's proposal, calling it "absolutely the wrong way" to go and amounts to "new window dressing" on the failed idea of a government fix.

"At a time when major government programs like Medicare and Medicaid are already on a path to financial collapse, creating a brand new government program will not only worsen our long-term financial outlook but also negatively impact American families who enjoy the private coverage of their choice," he said.

There are also many American families who don't have that choice or are losing it when they lose their jobs during the economic downturn, Reid said, adding that once someone loses coverage it's nearly impossible to regain it under current insurance practices that in effect make just about everybody who goes more than a month without coverage ineligible for a new plan.

Americans should recognize Reid's compromise for what it is, said Judi Hilman, executive director of the Utah Health Policy Project. It both underscores the need for reforms to be a state/federal partnership, and it gives those in charge of Utah's reform effort confidence that tailoring it to the state won't be for naught.

"We heartily applaud Sen. Reid's state-optional version of the public plan option," she said, noting that even though 69 percent of Utah small-business owners surveyed recently said they wanted a public plan option. "I have confidence that Utah will figure out a way to make insurance affordable and accessible without a public plan."

Insurers say they they recognize that continuing annual increases in premiums, co-pays and deductibles has reached the point of diminishing returns, but adding a public option would just drive premium costs higher.

The American Health Insurance Plan, the national trade organization for commercial providers, said in a statement that a public option bodes increasing payment differentials between the public and private payers and the potential for further spiraling as private sector enrollees, facing continuously higher premiums, leave the market."

Rep. Dave Clark, R-Santa Clara, Utah House speaker and co-chairman of the Legislature's special health-care reform task force, reiterated his "Utah solutions to Utah's problem" approach.

"We already have a health-care system in Utah that is bottom three in cost for the nation," he said. "As I understand the latest version — always subject to numerous changes — I would recommend Utah opt out."

The Reid compromise holds no water with other GOP Utah legislators who recommended that Utah be first in line to opt out of any reform law approved in Congress, regardless of attempts at finding some middle ground.

Rep. Carl Wimmer, R-Herriman, said he will introduce a bill in January's Legislature that "will get us out" of any "federal, single-payer public option law."

That might be the best way to go, agreed Utah Senate Majority Leader Sheldon Killpack, R-Syracuse. However, while not liking the general idea of a public option, Killpack said he doesn't yet know enough about what will come out of Congress.

What, for example, if the federal government decides states can opt out of the public insurance plan for citizens, but still require Utahns to be taxed to pay for that option?

"The federal government sometimes gives us the option to get out" of a federal program, like the CHIP, the state/federal plan for children in working low-income families, "but you have to pay in," Killpack said.

Wimmer is one of the leaders of the Patrick Henry Caucus, a states' rights movement starting up in several state legislatures.

The Reid U.S. Senate bill "still (has) the federal government so involved in health care," said Wimmer. "And it shouldn't be. Maybe (Reid) can buy a few votes with this (public option opt-out by a state), but I hope all Republicans will still oppose it," he said.

GOP Gov. Gary Herbert says it is too early to take a stand on the Senate Democrats' bill because it hasn't been written yet.

"That said, the governor has repeatedly said that the best type of health-care reform is one that allows states to be innovative, and to find the solutions that work best for their citizens," said Herbert spokeswoman Angie Welling.

Utah's own health-care reform — the Utah Health Exchange and other system streamlining efforts — is literal progress that should be allowed to continue under the legislation ultimately passed by Congress, said Welling.

The op-out trigger under Reid's proposal is that states develop coverage options and other real, working alternatives to sharing access to care and aren't just keeping federal involvement at bay.