Cantwell and Carper, both Senate Finance members, are supposedly floating new public option alternatives.
Carper’s been talking to Democratic leadership about giving states the option of creating a competitor to private insurers, which could include a government plan, a network of co-ops, or a large purchasing pool. Cantwell would give states the power to negotiate with insurance companies to create a basic health plan to cover the uninsured. Cantwell is preparing to offer her idea as an amendment during the mark-up. Carper won’t offer his idea as an amendment, but suggested it’s getting a good look from Senate Majority Leader Harry Reid, who will be responsible for merging the Finance and HELP bills.
It's hard to see how either of these plans are conceptually much better than Conrad's co-ops, at least in terms of effectiveness. The reason that we need a national public option is because we need a public entity that has enough of a market share to actually compete, to be able to set rates and negotiate payments with providers. States would have an advantage over co-ops, depending upon the restrictions that Congress decided to place on them, in that they'd have somewhat larger purchasing pools, but probably still not large enough to compete with the insurers that have virtual monopolies in most states.
More as this develops and we see the actual language.
Update: In thinking about this more, what could be a really good idea would be to allow states to band together--let the states that want it join up, have a "Blue State option." If Nebraska and Arkansas and Louisiana don't want in, they don't have to be in, but states that could create large pools, either regionally or whatever, could be allowed to do so.
Update 2: This would mean mandates would have to come out of the federal bill.