The Senate final version of health care legislation will include a public option, Senate Majority Leader Harry M. Reid announced yesterday, pleasing liberals while loosing Olympia Snowe’s support, the only Republican who voted in favor of the Senate Finance Committee bill.

States would be able to opt-out of the public option, designed to ensure that mandated coverage remain affordable by providing more choice and competing with private insurers. The proposal was sent to the Congressional Budget Office for a cost analysis, the Washington Post reports.  

The risk of losing Snowe made Obama reluctant to support Reid’s gambit, but White House spokesman Robert Gibbs told reporters Monday that the president is “pleased that the Senate has decided to include a public option for health coverage,” while noting the measure’s potential to hold “insurance companies accountable through choice and competition.”

Despite the uncertainty, Reid said that omitting a public option would leave too few guarantees that the health coverage Congress would require Americans to buy would be affordable. Democrats have already significantly weakened major cost-containment provisions in the House and Senate bills. A proposal to end the tax-free treatment of employer-provided health benefits — the most expensive loophole in the tax code — has been scaled back in the Senate to become a tax only on the most expensive policies. And neither chamber has fully embraced an independent commission conceived to dilute Congress’s powers to determine Medicare spending.

While Democrats praised its ability to control costs, the opt-out public plan represents a much less dramatic approach to federal coverage intervention than liberal advocates had sought — or insurance companies had feared. Health-care policy experts said the emerging legislation contains few provisions that would clearly drive down costs.

Even though Reid is not certain he will have enough votes to support the legislation, he said there was a momentum in the Senate to move forward to reform the nation’s system and that the bill should be as strong as possible.

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