End of Public Option?

ABC News' Z. Byron Wolf reports:

The long slow death of the public option may be nigh. It has been clear for some time that Democrats in the Senate lack the votes to pass a public option. Several moderate Democrats and Independent Joe Lieberman have said they would filibuster the bill with Republicans if the bill has a public option.

What remains is for progressives and conservatives within the Democratic caucus to coalesce around an alternative that can draw the moderates, but also progressives in the party who have committee only to support the public option. The latest idea: substituting a government-run public option with national private health plans overseen by the federal Office of Personnel Management .

In exchange for relenting on the public option, progressives have suggested they could be satisfied by an expansion of Medicare eligibility – from 65 to 55.

Details on all this are murky and there is no indication that accord has been reached. Would people under the age of 65 still only pay the $96.40 monthly premium that older Medicare recipients pay? All those issues have to be worked out.

Instead of the public insurance option that Democratic leaders initially suggested, what is emerging in closed-door negotiations that began last week, stretched through the weekend, and continue today, is a proposal to expand what members of Congress and federal workers have – the Federal Employee Health Benefits Program.

The plan is being modeled off a proposal called the SHOP Act, first introduced in 2008, that would have sought to create a national purchasing pool for small businesses and individuals who don’t get their insurance through work.

Among the cosponsors of that bill were two Republicans Democrats are eying to ultimately join with them on a comprehensive reform bill – Olympia Snowe and Susan Collins from Maine. Lieberman was also a cosponsor of the SHOP Act, as were moderate Democrats like Mark Pryor and Blanche Lincoln of Arkansas.

The pool would be administered by OPM, the federal agency known as Office of Personnel Management. But it would rely on private insurers, although they would have to forego profits on the plans offered. Buying into the national pool would be one option in the regional exchanges envisioned in Democrats’ proposal.

Federal employees already have options, particularly in areas where there are a lot of federal workers It is unclear how much these benefits would cost for non-government workers, who already pay a premium, but are subsidized by their employer, the federal government.

The group of 10 Senators – 5 progressives and 5 conservatives – have sent language for some ideas to the Congressional Budget Office for a cost assessment. That could take a week or more.

If Democrats want to negotiate the parliamentary gauntlet in the Senate and pass a bill before Christmas, aides say they will have to have a deal between moderates and progressives, a CBO cost estimate, and language by early next week.

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