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Multiple Reports That Senate Bill Will Include Public Option With Opt-Out

The Wall Street Journal reports tonight that Harry Reid is going along with the opt-out:

WASHINGTON — Top Senate Democrats are close to finalizing their health bill and could unveil a measure as soon as early this week that would include stiffer penalties on employers who fail to provide health coverage.

Senate leaders plan to submit the bill to the Congressional Budget Office for a cost estimate as soon as Monday, and make the legislation public as soon as Tuesday, according to a person familiar with the negotiations.

Details of the legislation could change, but its broad outlines are becoming clear. Employers with more than 50 workers wouldn’t be required to provide health insurance, but they would face fines of up to $750 per employee if even part of their work force received a government subsidy to buy health insurance, this person said. A bill passed by the Senate Finance Committee had a lower fine of up to $400 per employee.

The bill to be brought to the Senate floor would create a new public health-insurance plan, but would give states the choice of opting out of participating in it, a proposal that Senate Majority Leader Harry Reid of Nevada backed last week.

CNN has the same story.

Now, the other provision highlighted in the WSJ’s reporting is the employer mandate. The AP expanded upon this with more detail tonight as well. I was told this week that the employer mandate question was being considered, and it would be among the most controversial in the entire legislation and would probably be saved until the end, so it rings true that we could see final legislation head to the CBO Monday or Tuesday.

As for the employer mandate, the HELP bill had a real one. The Senate Finance Committee excised it, and in its place put in a “free rider” provision that was immediately called the worst policy in the world. This penalizes companies who have uninsured workers on their payroll eligible for subsidies, not just for denying to offer coverage to workers. If a company pays their employees enough, no penalty. Similarly, if a company hires someone who has family income above the subsidy level, they’re fine. It would encourage hiring of those who already have a family income rather than a single mother or individual breadwinner – or it would encourage hiring undocumented workers ineligible for subsidies.

The bill reportedly increases the penalty for not offering coverage to those who would qualify for subsidies, but that only increases the likelihood for discrimination against low-income workers.

Other details in the AP story: the bill would maintain the SCHIP program rather than fold it into the insurance exchanges, something Jay Rockefeller has been fighting for and generally a good idea. Maria Cantwell’s proposal, which was approved as an amendment to the Finance Committee bill, which would allow states to negotiate for group coverage for residents below 200% of the federal poverty level, will be in the bill as well.

Of course, of great interest to everyone who has been watching this odyssey is the inclusion of the public option, left for dead just a few weeks ago, along with a state opt-out provision. Traditional media and DC elites have marveled at its resiliency in the debate, even after the President himself reportedly worked to kill it in favor of the trigger proposal last week. The White House took the unusual step of posting a denial on their blog about the matter, with communications aide Dan Pfeiffer saying:

In his September 9th address to Congress, President Obama made clear that he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition. That continues to be the President’s position.

Senator Reid and his leadership team are now working to get the most effective bill possible approved by the Senate. President Obama completely supports their efforts and has full confidence they will succeed and continue the unprecedented progress that is being made in both the House and Senate.

Progressive groups tore into the President over the weekend, with the Progressive Change Campaign Committee releasing an ad and creating an unique photo petition of former Obama staffers demanding that Obama get behind a public option with no triggers. The PCCC remains unimpressed by Pfeiffer’s statement, asking of the President, “How long will he refuse to fight?”

It’s entirely possible that there’s some kabuki theater going on, with Reid bringing along a bill and then finding himself unable to break a filibuster with this version of the public option, at which point it gets downgraded to the trigger. Any loss of momentum on a bill like this could prove fatal, however, so my guess would be that a bill would be built to pass.

Monday should be interesting.

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David Dayen

David Dayen