(Thumbnail image from The New York Times)

“As we’ve gone through this process, I’ve concluded, with the support of the White House and Senators Dodd and Baucus, that the best way to move forward is to include a public option with the opt-out provision for states. Under this concept states will be able to determine whether the public option works best for them and will have the ability to opt out.” (CNN)

Senate Majority Leader Harry Reid announced this week that he's adding a government-run insurance plan to his health care reform bill, with a provision allowing states to opt out of the plan. Supporters of the opt-out provision say it will create needed competition among insurance companies. Opponents say it will drive up costs.
 

On NBC, Democratic New York Senator Charles Schumer supports the opt-out provision. He says the option is flexible.

“And the one other thing I’d say and this is really important, you’re not required to take the government option, it’s not a government plan being forced on people, that was the rhetoric in August. It’s an option. If you don’t like the private insurance, go to the public option. If you picked the private insurance, stick with it. But even there the public option would force them to be a little better.”

But a blogger on AlterNet says the states will have a hard time saying no to this provision.

“Remember, the federal government forced states to raise the drinking age and establish uniform speed limits by threatening to withhold federal transportation dollars. Each state had the right to opt-out of that transportation funding but, in the end, none of them did.”

A CQ Politics reporter tells FOX News that rural states will be more likely to support the plan proposed by the Democrats.

“There are some rural areas in Wisconsin and that part of the country where there are only one or two private insurers. The people who want a public option, whether federally-run or state-run, say that sometimes you need an alternative just to inject some competition into what is otherwise a monopolistic market. That has some appeal to rural state lawmakers.”

But what about states that aren’t as fond of the provision? A Dow Jones Newswires columnist tells the Wall Street Journal that they don’t have to follow suit.

“It’s an American thing to experiment, let different states try different things and I think this makes it more palatable for those red states that don’t want to be involved in this. They can say well we’ll just opt out of it…There’s going to be a public option of some form or there’s going to be no health care reform at all.  That's what I'd say.” —Al Lewis, Columnist, Dow Jones Newswires

What do you think about the opt-out provision?  How do you think your state would react if given the choice?