There's a Public Option and Then There's a Public Option...

The Senate Finance Committee defeated two efforts to add a public option to Baucus authored health reform bill, but proponents have note ceded defeat. In fact, many are being heartened by recent statements from Harry Reid that “We are going to have a public option before this bill goes to the president's desk.”

What does this mean? Will Reid ensure that the public option is retained when the Senate Finance and Senate Health, Education, Labor, and Pension committee bills are merged? Does it mean that he will ensure that the public option survives the House/Senate conference process? Does it mean that he plans to use reconciliation to pass the bill and has sufficiently prepared for all of the challenges that would present?

Or does it mean that Reid is choosing his words wisely? Moments after his initial comments were made public his office offered a follow-up: “Sen. Reid believes that health insurance reform must include a mechanism to keep insurers honest, create competition and keep costs down… the public option is the best way to do that… we don't know exactly what that option will look like.”

I’d suggest that it won’t look like a federal public option, rather it is more likely to come in the form of the amendment drafted by Tom Carper (D-DE). Carper’s amendment would:

give states the authority to increase competition in health insurance markets by implementing one of the following mechanisms listed below. This would allow a state to offer a state public option; however, both the executive and state legislature would have to agree.

The state would have the option of implementing one of the following mechanisms:

1. Participate as grantees in the CO-OP program and apply for seed funding.

2. Open up that state’s employee benefits plan.

3. Create a state administered health insurance plan with the option of banding together with other states to create a regional insurance compact.

So states could participate in the co-ops created in the Baucus bill as a substitue for a national public option, open the state's insurance plans, or create a state based public option... This is hardly a significant change and arguably "allows" states to do things that they can already do.  So I would advise tempering any excitement over Reid’s comments.