How the Opt-Out in Health Care Reform Would (Or Would Not) Work

This is a rush transcript from "On the Record," October 27, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Well, it certainly didn't take long, did it. A Capitol Hill battle has erupted. Senator Majority Leader Harry Reid says the government-run public option will be in the health care bill, but states will be -- that states will be able to opt out of the plan. Well, the reaction, swift, fierce, and a headache for Democrats.

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN, I - CONN.: I said to him, Harry, I'm going to support the motion to proceed because I think we've got to start this debate. But if the idea that you have for so-called public option stays in there at the end, I'm not going to support an end to a filibuster to try to stop this bill because I think such a government-run health insurance company will be bad for our country and really will hurt taxpayers.

SEN. EVAN BAYH, D - IND.: A variety of other things I think might work better. The question is, is this enough flexibility for states to account for their own circumstances? And the question to that -- and the answer to that is perhaps.

I'd like to see analysis from an independent source about what this will mean for premiums that people who currently have insurance pay. And if this is going to increase the amount that people who currently have insurance pay, I would have a very hard time supporting like that.

SEN. OLYMPIA SNOWE, R -MAINE: I was surprised and disappointed, as I said yesterday, when I heard the news because I thought it was important to create a bipartisan, you know, approach to health care reform to the extent that it was, you know, possible.

(END VIDEO CLIP)

VAN SUSTEREN: Republican senator Judd Gregg almost ended up in President Obama's cabinet. So can he be pulled to Senator Reid's side? Earlier, Senator Gregg went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Senator, thank you very much for joining us.

SEN. JUDD GREGG, R - N.H.: Thank you, Greta, for having me on. I appreciate it.

VAN SUSTEREN: Senator, I understand that the opt-out that Senator Harry Reid is now suggesting or now promoting as being the health care reform he'd like to see, the opt-out for the states -- how does it work mechanically? If your state, for instance, opts out, what does -- how does it affect you?

GREGG: Well, nobody can opt out. I mean, we already have an opt-out program. It's called Medicaid. It's like saying to your kids that they can opt out of an allowance. I mean, nobody's going to do it because unless they can also get tax revenues that they're paying in, why would anybody ever opt out? Because then you'd be paying taxes in your state to support some other state. So it makes no sense at all. It's simply a -- it's a fig leaf to try to cover up the fact that the basic goal here is to create a nationalized system, to go to a single-payer plan, and to do it using this government plan as basically the vehicle by forcing people off their private insurance and into a government plan.

VAN SUSTEREN: All right, in terms of this opt-out plan, is this something that Senator Reid is the one who came up with it? Because I don't remember it's being part of the Senate Finance Committee or HELP Committee. It's almost as though it suddenly showed up on the horizon the other day. Am I wrong about that ? Because it looks like it's Senator Harry Reid and not the U.S. Senate and not -- certainly not the U.S. -- the Democrats' U.S. Senate necessarily coming up with it.

GREGG: Well, the entire bill, as you know, Greta, has been written in a room, a very small room somewhere here in the Capitol by three or four senators, and none of us have seen it, even though, if I recall, they said this was going to be a very open process.

So I have no idea who came up with it. Obviously, Senator Reid is promoting it right now and he's -- I think it's obvious what the game plan is. He wants to use it as a way to basically deflect the fact that the underlying bill, if it has a government plan in it, will be promoting a government plan. And government plans inevitably lead to people getting less quality health care in that there's inevitably price controls and rationing and delays. And it also leads to much less innovation because the simple fact is the government underfunds these accounts. And as a result, people stop seeing doctors because doctors won't see them.

VAN SUSTEREN: Well, and I understand that it may be done this way on other occasions and other bills, that things are added on later or a new direction. But I guess on such an important bill as this one, that if that was going to change the way we live, essentially, for the better or for the worse, it seems odd to me that we would spend all this time on those hearings, having the having the give-and-take, back-and-forth, not even between the two parties, but even among and between the Democrats themselves, and then the bill gets finished, supposedly, by the Senate Finance Committee, and all of a sudden, Senator Reid comes up with his own brand-new version. That's the way it looks like to many Americans, and that doesn't seem right as a process.

GREGG: It isn't right. It absolutely isn't right, Greta. And you know, it's totally inappropriate that a bill that's going to affect 16 percent of our economy and everybody's life should basically be -- and it's going to be 1,200 to 1,500 pages -- should basically be written in a room which nobody can get into, other than two or three senators, and then suddenly be brought out and put on the desk of the senators and told, This is it, take it or leave it. The American people get to choose this, or essentially, they're going to -- you know, it's an up-or-down situation on this piece of legislation. And it's not an appropriate way to do legislation. It's certainly not correct when you're talking about this type of legislation, which is so huge and has such a pervasive impact on everybody's life.

VAN SUSTEREN: All right, in terms of this opt-out provision, is it likely to get passed? I know that Senator Olympia Snowe doesn't look like she's going with the Democrats. Senator Lieberman has drifted away from it (INAUDIBLE) Evan Bayh has not committed. There are certain -- it does not appear that this government opt-out is going to pass. Is this in some ways just sort of a mirage in the sense that now they'll come back and say, OK, not opt-out, we'll do the trigger, and everyone sort of will seize upon that as being a compromise?

GREGG: Well, I think in the end, when the bill comes back from conference, there will be a government plan in there that's pretty much fixed and will essentially be used as a way to control the market and control prices and thus inevitably lead to some sort of delays and rationing and to forcing other insurance products out of the market because it'll be able to underprice using the power of the government and using price controls, essentially, just as they do in England, where you essentially have price controls and therefore, delay and rationing.

I think that's the inevitable -- that's the plan. That's what will happen in the end, if some of my friends on the other side of the aisle get their way. Whether it is done with a trigger, whether it's done with an opt-out, it all means the same thing. It all means a government plan, and a government plan inevitably means that people will have less opportunities to see fewer -- to have fewer -- and will have fewer choices, and you's inevitably go down the road of some very significant limitations on the availability of health care in this country.

VAN SUSTEREN: Senator, thank you, sir. Thank you for joining us.

GREGG: Thank you, Greta.

(END VIDEOTAPE)

Content and Programming Copyright 2009 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.