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US senate panel rejects public health insurance option

world Updated: Sep 30, 2009 12:57 IST

In a major setback to President Barack Obama's plans to overhaul America's health care system, a Senate panel has rejected an amendment to include a government-run public health insurance option.

The Senate Finance Committee on Tuesday rejected two Democratic amendments that would have created a government-run "public option" with the panel's chairman bowing to staunch Republican opposition that he said would prevent final passage of a bill containing such a provision.

After an amendment offered by Senator John D Rockefeller was voted down 15 to 8, the committee voted 13 to 10 to reject a second public-option provision introduced by Senator Charles E Schumer. The committee's Democratic chairman, Senator Max Baucus, voted against both politically volatile amendments, saying he feared that a bill including either one would not get the 60 votes it would need for passage by the full Senate.

"I fear if this provision is in the bill, it will hold back meaningful reform this year," Baucus said.

Republicans stood solidly against both provisions, arguing that they would lead to complete government control over health care. But Schumer vowed to keep pressing for a public option on grounds it was the best way to control rising health-care costs.

Rockefeller and Schumer argued repeatedly during the committee's markup that a public option would be the best way to give consumers an affordable choice in health insurance and rein in what they described as voracious, profit-driven private insurance companies.

Republicans charged that both plans would lead to a government "takeover" of the health-care system and ultimately force private insurers out of business. Some Democrats also took issue with aspects of the public option plans.

The debate came as the committee worked for a fifth day on an overall health-care reform bill authored by Baucus.

His bill, which he says would cost nearly $900 billion over 10 years, contains no public option, favouring instead a system in which nonprofit cooperatives would offer health insurance to people who could not afford private companies' plans.

Democrats who favour a public option argued that polls show 65 percent of Americans support including it in health-insurance reform legislation.

House committees have included such an option in their proposals, and President Obama has expressed support for a public option, while also indicating that this is not the most important consideration for him and leaving the way open for cooperatives.