After raucous town hall meetings appeared to discourage moderate lawmakers from pursuing a government-run health insurance plan, both chambers of Congress are starting to warm to the idea once more.
A compromise is emerging in the Senate on a government-run health insurance plan that would give states an opportunity to either opt out of or opt into the program.
At the same time, House Speaker Nancy Pelosi pledged Thursday that a public option will be in the final legislation, though she may lack the votes to get the version she wants.
The big question is what form the public option would take.
In the Senate, Democratic sources say Senate Majority Leader Harry Reid and many key Democrats prefer a plan that would allow individual states to drop out of the program. Reid was testing support for that idea and for another alternative, which would hold government-sponsored insurance coverage in reserve and "trigger" it only if private companies weren't providing enough affordable alternatives in given states.
The "trigger" version has the advantage of being backed by Sen. Olympia Snowe of Maine, the only Republican so far to vote for health care legislation. President Obama would like to end up with a health care bill with at least a hint of bipartisanship so bringing Snowe along is seen as important, and she's voiced skepticism about other versions of the public plan.
Some concerns still exist for moderate Democrats, like Sens. Ben Nelson, D-Neb., and Blanche Lincoln, D-Ark., among others. But one moderate Democrat, Sen. Mary Landrieu, D-La., expressed optimism Friday after meeting privately with Reid.
"It really is a possibility," she said. "There is a way to complete this, I believe."
Landrieu has been inside meetings with her fellow moderates for months. She described a plan that would be modeled on the health plan for federal government employees, called Federal Employee Health Benefits Plan (FEHBP), which could be started with federal "seed money" and run by a private, independent board, rather than the government. The program would be funded by an earnings pool created from premiums.
"It's a private insurance model," Landrieu said, insisting that it neither be "government-run, government-backed, nor government paid-for."
Landrieu had some criticism for the more liberal members of her caucus, saying that "this may not meet their requirements" for a "single-payer, government-run, government-subsidized" insurance plan. But Landrieu said her group would not accept anything like that.
The senator said her group was trying to combine a proposal that emerged from the Senate Finance Committee creating a system of nonprofit cooperatives with a states-based approach to a national plan authored by Sen. Tom Carper, D-Del.
"It's evolving. At this point ... some solid compromise is possible," Landrieu said, pointing to about five or six Senate Republicans that she thought might be persuadable -- including Maine Sens. Susan Collins and Snowe, as well as Sens. George Voinovich of Ohio and Bob Corker of Tennessee.
Corker showed no signs of budging Friday, saying he's wary of Democratic proposals.
"I think all of us need to have our antennas up during this health care debate that's coming up," he told Fox News. "All of us need to look at the details of this as it unfolds."
All of the GOP senators mentioned by Landrieu have varying levels of concern about the bills passed by the Senate which Reid and administration officials are trying to merge.
Landrieu, though, did not want to discuss the proposal for a plan which states could opt in to or out of -- a signal that the idea might not attract widespread support among moderates.
Sens. Nelson and Evan Bayh, D-Ind., both former governors, along with Lincoln, have expressed a great deal of concern toward the "opt out" option, the one favored by Reid and many other Democrats.
Nelson wanted to know how difficult it would be for states to opt out, fearing that those who want a more robust public option would virtually lock states into the plans.
Senate Democrats still have a lot of negotiating to do to bring a bill to the floor. Leadership aides have told Fox News that a bill will likely not be sent to the nonpartisan Congressional Budget Office for a final analysis and cost estimate until Monday or Tuesday of next week.
Moderates want to see more choices and greater affordability for all Americans in the bill that Reid is creating, a sentiment often expressed by more liberal members as well.
Pelosi indicated openness Friday to the "opt out" plan though it's not been under active consideration there.
Her preferred option would tie reimbursement rates to doctors and hospitals to rates paid by Medicare, but it didn't appear to command enough support to prevail. Some moderates have been wary of that approach because those lower rates could hurt hospitals and providers, particularly in rural areas.
Fox News' Trish Turner and The Associated Press contributed to this report.