States ‘opting out’ is a healthcare option

House Speaker Nancy Pelosi (D-San Francisco) said Friday that states might be able to “opt out” of any nationwide government insurance plan, a compromise that she suggested could unify congressional Democrats and enable President Obama to sign a healthcare overhaul bill later this year.

Pelosi remains a leading champion of the “public option,” which would establish a federal health insurance program that would give consumers who don’t get coverage through their employer an alternative to plans offered by commercial insurers. But she told reporters at the Capitol that she did not “think there’s much problem” with the opt-out alternative, which had sparked interest among moderate Democrats in the Senate.

“The robust public option is, in my view, a preferred way to go,” the speaker said. “It’s not the only way to go.”

A group of Senate Democrats is also trying to build support for such a plan in the healthcare bill that Senate Majority Leader Harry Reid (D-Nev.) is planning to bring up for a vote next month.

Reid and Pelosi are advancing separate healthcare bills in the Senate and House. The House is not currently considering a proposal that would allow states to opt out of a federal insurance plan. But Pelosi’s remarks Friday opened the possibility that the opt-out alternative could be included in a reconciled bill that would be sent to the White House.

In the Senate, the opt-out proposal, which is being championed by Sens. Charles E. Schumer (D-N.Y.) and Thomas R. Carper (D-Del.), has sparked interest among some moderates who like the concept of allowing states to regulate their own insurance markets.

And some liberal groups like Health Care for America Now, a leading consumer coalition pushing for a public plan, have expressed openness to the idea under some conditions.

“We prefer to see something in every state on Day One,” said the group’s national campaign director, Richard Kirsch. “So if you have an opt-out, you’d like to see something that was available immediately.”

But Democrats in the Senate remain divided. With a 60-40 majority, including two independents who caucus with Democrats, Reid has to hold all his members or pick up Republicans to head off a Republican filibuster.

Sen. Bill Nelson (D-Fla.), a former state insurance commissioner, has expressed deep reservation about a plan that allows states to choose not to have a public option. He noted that insurance companies, which vehemently oppose a government-run option because it might undercut them, could pressure states to opt out. “I saw how the most powerful lobby in the state legislature was the insurance industry, and they could pretty well get what they wanted,” he said.

Other conservative Democrats in the Senate do not want any new government program, even if states can opt out. “Medicare is going bust in seven years,” Sen. Mary L. Landrieu of Louisiana said Friday, citing fiscal problems with the existing insurance program for the elderly.

Obama has expressed interest in creating a “trigger” that would establish local public options only if commercial insurers do not provide affordable plans to consumers, an idea proposed by Sen. Olympia J. Snowe of Maine, the only Republican to back the Democratic healthcare campaign.

The president discussed this idea Thursday with Senate Democratic leaders at the White House, according to senior Democratic aides briefed on the conversation.

But the “trigger” idea enrages many Democrats who believe a government plan cannot be postponed.

“The only way to curb price-gouging by health insurance companies is with real competition on Day One. That is the public option,” Sen. John D. Rockefeller IV (D-W.V.) said Friday.

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noam.levey@latimes.com

j oliphant@latimes.com