The forces in favor of a public health insurance option roared back Thursday on Capitol Hill after weeks when their cause looked bleak. Public option backers fight on

The forces in favor of a public health insurance option roared back Thursday on Capitol Hill after weeks when their cause looked bleak.

House Speaker Nancy Pelosi (D-Calif.) looked closer than ever to including a robust U.S. government-run insurance program in the House bill — saying recent attempts by the health insurance industry to undercut reform prove insurers can’t be trusted.


And in the Senate, a weekly policy lunch turned into a heated debate when liberals went after the Senate Finance Committee bill and made clear they won’t roll over for legislation that doesn’t include a public option.

Reflecting deep divides within the caucus, the Senate luncheon turned tense, with voices elevated and senators venting. “In today’s lunch, it even involved a little performance theater,” Sen. Evan Bayh (D-Ind.) said, describing it as an “emotional catharsis.”

In a week when the Senate Finance Committee passed a bill without a public option — raising questions about whether that would prove the public option’s last gasp — progressives in both houses showed they won’t go down without a fight.

And Thursday proved that if President Barack Obama hoped the public option question would fade of its own accord, he probably won’t get that lucky — but will be forced to referee a compromise between liberals and moderates.

But in the House, moderates stand to suffer the most if Pelosi goes ahead with plans to include the most ambitious public option — forcing them into a tough vote that will surely be used by Republican opponents in 2010.

In the House, Pelosi told her rank and file Thursday that the time has come to “freeze the design,” meaning she wants unveil a completed House bill as early as next week.

Pelosi favors a public-option plan supported by liberals that reimburses doctors at rates that are 5 percent higher than Medicare — one of the strongest versions of the public option on the table.

Pelosi used the reports put out this week by the insurance lobby — which said reform would add thousands to family insurance premiums — to show the public needs some defense against the industry.

“Anyone who had any doubts about the need for such an option need only look at the behavior of the health insurance industry this week,” Pelosi said. “If you are going to mandate that people must buy insurance, why would you throw them into the lion’s den of the insurance industry without some leverage with a public option?”

Liberals and even some leadership aides suggest the speaker has about 200 votes for a public option tethered to Medicare — not the 218 she needs but well within striking distance. The question, though, is whether those members support the overarching bill.

Pelosi is juggling other proposals to find a middle ground in that standoff. The latest would be to reimburse hospitals at a rate 5 percent higher than Medicare. But moderates quickly rejected it, saying it still wouldn’t do enough to help rural hospitals.

“It’s not nearly enough,” South Dakota Rep. Stephanie Herseth Sandlin said as she left a Thursday morning meeting with the speaker and other party leaders.

So now it comes down to cost.

The Congressional Budget Office is expected to deliver cost estimates to the House in the next few days that will show a public option tied to Medicare saves more money than one in which doctors can negotiate reimbursement rates directly with the government.

Armed with those numbers, liberals, and perhaps even the speaker, will put pressure on their fiscally conservative colleagues to embrace the plan that saves the most money, pitting parochial concerns against small-government principles.

For months, Blue Dogs have been telling anyone who would listen that cost concerns about the overarching bill trump the debate over a public option, despite all the outside attention paid to that fight.

“This is becoming a false choice,” said Utah Rep. Jim Matheson, an influential Democrat in the conservative Blue Dog Coalition. “I find it interesting how the discussion seems to be dominated by the public option, but I think there are other top-line issues that will be more important for how some members vote.”

In the Senate lunch, about a half-dozen Democrats — some of whom sit on the Health, Education, Labor and Pensions Committee, which passed a bill with a public option — made a plea to the leadership. One after the other, senators such as Democrats Sherrod Brown of Ohio and Chris Dodd of Connecticut and independent Bernie Sanders of Vermont argued in favor of a strong government insurance plan in the final legislation.

Sanders made one of the more emphatic pitches, according to people present at the meeting. He has been highly critical of the Finance Committee bill, saying it is “extremely weak.”

Finance Committee Chairman Max Baucus (D-Mont.) stood to defend his bill, saying, “We are trying to do the best we can; we are trying to get a product that works,” Bayh said.

Multiple senators described the meeting as “spirited” — Senate-speak for a gathering in which members did not hold back. It underscores the divide that Senate Majority Leader Harry Reid (D-Nev.) and Obama have yet to bridge.

“A lot of different ideas [were] being expressed very candidly, some maybe a little louder than others,” said Sen. Ben Nelson (D-Neb.). But he added, “It was tamer than a lot of town hall meetings.”

Brown emerged optimistic from the meeting, where he said no senators spoke up against the public option.

“Reid is making these decisions ultimately, and I believe he is listening,” Brown said.

There was no discussion of the public option compromises, including giving states the ability to create their own public options or allowing states to opt out of a national government plan, Brown said.

“We have compromised already,” Brown said. “We compromised single-payer to the public option with Medicare rates, which would have been obviously a much bigger scoring advantage for the CBO, to this language. I don’t see a lot more room for compromise.”

The thrust of the caucus meeting was to lay out the differences between the Senate Finance and HELP committee bills. Baucus and Dodd, who is leading negotiations for the HELP Committee, made presentations. The leadership did not give an indication of which way it was leaning on the key outstanding issues — including the public option, the tax increases and the mandate on employers and individuals, senators said.

Reid acknowledged the tensions after emerging from the meeting.

“There are many competing views as to how to best move to health care reform,” Reid said. “There are different views within my caucus. There are different views in the House.”

But Baucus said he expects Democrats to unify around the bill.

“Every Democrat will vote for national health care reform, and I’m hopeful that several Republicans will as well,” Baucus told reporters.

Reid will meet again Monday with Baucus, Dodd and administration officials to continue negotiating the merger of the two Senate bills.