How the Public Option would work

From the NYT:

HOW IT WOULD WORK Both bills would create new insurance exchanges, with an array of plans to choose from, for a limited number of Americans — those who lack group coverage and must buy policies directly from insurers and those who work for small employers, about 30 million people within a few years. With millions of potential new clients, all major insurers are expected to participate. And Congress willing, a new public plan would also be available.

The government would run the public plan, but both the Senate and House versions would require it to compete on a “level playing field.” It would have to follow the same rules as the private plans, meet the same benefit standards, maintain the same reserves, and support itself entirely with premium income, with no federal help beyond start-up money that would have to be repaid.

The secretary of health and human services, as the head of the plan, would have to negotiate rates with health care providers just as the private plans do.

As the Times points out, the current bills are no great shake. Yet, a few Democrats still threaten to bring the entire bill down if we don't protect the industry that's lining their, and their wives', pockets.