Although the Senate Finance Committee rejected amendments to create a national government-run health insurance program earlier in the week, the Democrats were able to push through a provision for state-level public options on Thursday.
The committee voted 12-11 in favor of a proposal by Democratic Senator Maria Cantwell of Washington to allow states to negotiate with private insurers on behalf of low-income people to provide affordable insurance.
In explaining her proposal, Cantwell said that "hard-working Americans deserve choices for better coverage in the private insurance system," quoted by TheStranger.com.
However, she emphasized this is not a substitute for a federal public option, which she vowed to fight for.
Government-run health insurance is facing staunch opposition, mainly from congressional Republicans who claim it will drive private insurers out of business and lead to a government takeover of healthcare.
Some of them have proposed creating nonprofit health insurance cooperatives that could negotiate coverage as a collective for their members and provide the competition that many believe is required to drive down costs and boost efficiency.
However, most liberal Democrats – including House Speaker Nancy Pelosi – have rejected the idea of creating co-ops at the federal level.