Deal said to give up a public option

WASHINGTON - After days of secret talks, Senate Democrats tentatively agreed last night to drop a government-run insurance option from sweeping health-care legislation, several officials said, a concession to party moderates whose votes are critical to passage of President Obama's top domestic priority.

In place of the public option, officials said, Democrats had tentatively settled on a private-insurance arrangement to be supervised by the federal agency that oversees the system through which lawmakers purchase coverage. Additionally, the emerging agreement calls for Medicare to be opened to uninsured Americans beginning at age 55, a significant expansion of the large government health-care program that serves the 65-and-over population.

At a hastily called evening news conference in the Capitol, Majority Leader Harry Reid (D., Nev.) declined to provide details of what he described as a "broad agreement" between liberals and moderates on an issue that has plagued Democrats' efforts to pass health-care legislation from the outset.

With it, he added, the end is in sight for passage of the legislation, which Congress has labored over for months.

The officials who described the details of the closed-door negotiations did so on condition of anonymity, saying they were not authorized to discuss them publicly.

Politico.com reported last night that a group of liberal and moderate Democrats had agreed to ask the Congressional Budget Office to give them cost estimates on a possible compromise.

The development came as abortion foes failed, 54-45, to inject tougher restrictions into the Senate bill. Democratic leaders labored to make sure fallout from the controversy wouldn't hinder the drive to pass health legislation.

Taken together, the day's developments underscored the complexity that confronts Reid and the administration as they seek the 60 votes needed to pass a bill by Christmas.

In another controversy, Sen. Byron L. Dorgan (D., N.D.) proposed legalizing the importation of prescription drugs from Canada and several other countries as a way to hold down consumer costs.

The idea is opposed by the pharmaceutical industry, which has worked closely with the administration on health care and spent millions of dollars on TV ads in support of legislation.

The Food and Drug Administration issued a letter saying it would be "logistically challenging" to ensure the safety of imported drugs.

Reid - chief architect of the health-care bill, and an abortion opponent - played a prominent role in the debate over conservatives' efforts to toughen restrictions in the Senate measure.

"No one should use the health-care bill to expand or restrict abortion," he said. "And no one should use the issue of abortion to rob millions of the opportunity to get good health care."

The current bill would ban the use of federal funds to pay for abortion services under insurance plans that are expected to be offered in a new health-care system, except in cases of rape or incest or when the life of the mother is in jeopardy.

People who receive federal subsidies to buy insurance under the plans would be permitted to use personal funds to pay for abortion services - the point on which the two sides in the dispute part company.

"Segregation of funds is an accounting gimmick," said Sen. Ben Nelson of Nebraska, the chief Democratic supporter of tightening restrictions. "The reality is, federal funds would help buy coverage that includes abortion."

Abortion-rights supporters, female Democratic senators most prominently, countered heatedly. Sen. Dianne Feinstein (D., Calif.) said abortion opponents were driven by ideology. Sen. Jeanne Shaheen (D., N.H.) called the proposed changes "a very far-reaching intrusion into the lives of women."

The House has passed a health-care bill that includes the stricter abortion language.

The amendment that Nelson, Sens. Bob Casey (D., Pa.), Orrin G. Hatch (R., Utah), and other Republicans proposed would also have barred insurance plans from covering abortions except in the three categories if any of their policyholders received federal subsidies.

In all, 50 Democrats plus two Republicans and two independents voted to kill the abortion proposal; among those Democrats were Pennsylvania's Arlen Specter, New Jersey's Frank Lautenberg and Robert Menendez, and Delaware's Thomas Carper.

Thirty-eight Republicans and seven Democrats, including Casey and Delaware's Ted Kaufman, favored the proposal.

It was not clear whether the vote would mark the end of efforts by abortion opponents to change the bill before any final compromise talks with the House.

Casey said the amendment's defeat would not turn him against the bill as a whole.