Senate Bill Will Include 'Public Option' Opt Out

Senate Majority Leader Harry Reid said Monday that Senate Democrats will include in the health care reform bill a government-backed health insurance program that allows states to opt out if they can come up with an alternative.

"I think it's the fairest way to go," Reid said of the "opt out" proposal.

The "opt out" proposal would set up a national insurance plan with government seed money and be run by a private, not-for-profit board. Under the proposal, states would have to prove they can provide comparable coverage in order to exit out of the federal plan. The plan would also negotiate rates with providers just like private insurance companies do, presumably keeping premiums on a level playing field with the private industry.

The measure is one of a host of different so-called public options being considered in the Senate. Though the public option seemed off the table in the chamber just one month ago, it gained traction in recent weeks as Democratic leaders floated versions meant to be more appealing to party moderates.

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