Reid says healthcare bill to include public option

WASHINGTON (Reuters) - U.S. Senate Democratic leader Harry Reid said on Monday the Senate's sweeping healthcare reform bill would include a government-run insurance plan that lets states opt out of participation if they choose.

Reid said he would send the bill, which combines two pending Senate measures, to the Congressional Budget Office for a cost analysis and begin Senate debate on the measure as soon as the analysts report their findings.

"As soon as we get the bill back from CBO and people have a chance to look at it ... I believe we clearly will have the support of my caucus to move to this bill and start legislating," Reid said.

The Senate healthcare bill is the result of more than a week of negotiations between Reid, other Senate Democrats and White House officials, who merged two bills passed by Senate panels into one piece of legislation.

Democratic leaders in the House of Representatives are nearing the end of a similar process to meld three pending bills into one. All three House bills include a public insurance plan, but members are negotiating which version to use.

Reid did not say whether he had the 60 Senate votes needed to pass a healthcare reform bill that includes the government-run plan, a flashpoint in the raging debate over President Barack Obama's top domestic priority.

Obama and liberals support the public option as a way to increase competition in the insurance market, but critics call it a government takeover that would hurt private industry.

About a dozen moderate Democrats have voiced concerns about a public option. Reid needs them all to pass the bill in the Senate, where Democrats control exactly 60 votes.

Reid said Senator Olympia Snowe, the only Republican to support any of the pending healthcare measures in a committee vote, did not support the public insurance option.