Debate on the first public option amendment by Senator Jay Rockefeller of West Virginia started at around 9:30 am ET and continued for almost five hours before a vote was taken. Rockefeller made an impassioned appeal to the other Senators on the committee speaking from the heart and picking up the fight for all Americans who had been denied health coverage or can not currently get affordable health insurance coverage. He said his amendment, that contained a public option plan, was needed to create competition with the private insurance companies and keep them from continuing to gouge the American public with ever increasing health insurance premiums. He hammered the point that currently in many states only 1 or 2 private insurance companies control 80% or more of the market share. A number of other Democratic senators mused that maybe the anti-trust laws also needed to be re-evaluated when it came to the health insurance industry. Rockefeller also made the point that the current bill, as it stands, would provide a nearly half trillion dollar windfall for the insurance companies without any real competition to change the current behavior of the insurance companies or to keep costs in check.
Rockefeller said, "The insurance companies in my judgment are determined to protect their profits and put their customers second. It's a harsh statement but a true statement." The current bill contains no mechanism to keep insurance companies from continuing to raise the rates of their health care premiums four times faster than American wages. A public option plan would create that needed mechanism of choice and competition.
Rockefeller spoke at length about his amendment and made many cogent and reasonable arguments for the public option plan. Republican Senator Chuck Grassley, without looking up from his prepared statement, recited bullet points from a study done by the Lewin Group as arguments against a public option plan. In fact Republican after Republican used the same talking points put out by the Lewin Group, an entity wholly owned by the largest for profit private health insurer - UnitedHealth Group, to argue against the public option. The egregious conflict of interest that was obvious to just about everyone else in the room seemed to be lost on the Republicans.
It was recently revealed that the Lewin Group was part of Ingenix, a UnitedHealth Group subsidiary. Ingenix was accused by the New York attorney general, Andrew Cuomo, and the American Medical Association of helping insurers shift medical expenses to consumers by distributing skewed data. Ingenix supplied UnitedHealth Group and other insurers with data that allegedly understated the "reasonable and customary" doctor fees that insurers use to determine how much they will reimburse consumers for out-of-network care. In January of this year UnitedHealth Group settled the largest ever settlement over medical payments by a single insurer with American Medical Association for $350 million.
At the end of the debate, chairman Max Baucus praised the strong and impassioned arguments that Jay Rockefeller made for his amendment and praised its merits of providing a strong competitive backstop to the private insurers. Baucus indicated that he has no objection to the proposal itself. "I see a lot to like in the public option," he said. "The public option would help to keep the insurance companies' feet to the fire. There's no doubt about that."
Nevertheless Baucus stated that he would have to oppose the amendment because he did not see how he could pass a bill in the Senate with 60 votes that contained a public option plan in the final bill. That was his only objection.
Senator Kent Conrad opposed the amendment because of the provision in Rockefeller's amendment that tied payment reimbursements to Medicare levels for the first two years before the exchange could fully stand on its own. Senator Conrad (D-ND) said he opposed a Medicare-like public option on the grounds that North Dakota providers get low Medicare reimbursement rates. He said, "I oppose the public option because it is unfair to North Dakota". Because of this statement and because the second amendment by Schumer was not tied to Medicare reimbursement rates, political pundits were quickly speculating on how Senator Conrad would vote on the Schumer amendment.
The Rockefeller amendment was voted on and failed by a vote of 8 for and 15 against. Five democratic senators voted against the amendment along with all 10 of the Republican committee members. The five democratic senators that voted against the Rockefeller amendment were Bill Nelson of Florida, Max Baucus of Montana, Kent Conrad of North Dakota, Blanche Lincoln of Arkansas, and Thomas Carper of Delaware. Neither Senators Lincoln nor Carper made any statements during the debate and it was not immediately clear if they were even present for the vote.
The second public option amendment by Charles Schumer of New York was debated in the afternoon and many of the same arguments for and against were made. This amendment would have created a public plan to compete with private insurers on a newly formed marketplace, called the exchange. Unlike Rockefeller's amendment the Schumer amendment did not tie payment reimbursements to Medicare levels.
Max Baucus again made only the statement that he was against this amendment because he didn't think his bill with a public option plan could muster 60 votes on the Senate floor.
Because Senator Conrad's main objection to the Rockefeller amendment was its provision that tied reimbursement payments to Medicare levels, and the Schumer amendment did not contain this provision, it was thought by some that Conrad might vote for this amendment. In the debate prior to the vote, Conrad's comments were significantly more favorable towards the Schumer amendment but in the end he along with Baucus both voted against the amendment. Blanche Lincoln who wasn't in attendance voted no by proxy along with all 10 of the Republicans.
Democratic Senators Bill Nelson and Tom Carper, who voted against the Rockefeller amendment earlier in the day, both supported Schumer's amendment.
In the end, Schumer's amendment to add a public option also failed by a vote of 10-13 but ultimately had more support than the Rockefeller amendment. Democrats Baucus, Conrad and Lincoln were the only Democratic Senators to vote no and ultimately controlled the passage or in this case defeat of the amendment. Blanche Lincoln of Arkansas wasn't present at the debate and voted no on both amendments via a proxy vote. Had both Conrad and Baucus voted in favor of competition and in line with what 65% of the American public wants, a public option amendment would have been added to the Senate Finance version of health insurance reform. Most agree however that this committee is the most conservative all the committees working on health insurance reform and had the least chance of making it through committee with a public option plan. Nevertheless it should be noted that the only complaint made by Max Baucus of either amendment was that he didn't think he would have 60 votes in the Senate for a bill containing a public option plan.
Ironically, earlier in the day Senator Tom Harkin made the bold statement that he thinks the Senate now has enough votes to pass a bill that would contain the public option. Senator Harkin recently took over as the chairman of the Health, Education, Labor and Pensions (HELP) Committee previously held by the late Ted Kennedy. Public option proponents can take solace in the fact that the political winds for a public option appears to be shifting away from the damaging winds of August and political Kabuki theater on display in the Town Hall meetings. There are still a number of innings left in this ball game.