CNN’s Ed Henry and Dana Bash are reporting that the White House is negotiating with Sen. Olympia Snowe (R-ME) — a member of the so-called Gang-of-six tasked with producing a bipartisan health care bill in the Senate Finance Committee — to pass a “scaled-back bill that would focus on insurance reforms that both sides could agree to, but would not have a full public option, instead, would have a so-called trigger.” The negotiations come in advance of the Presidsent’s September 9th address to a joint session of Congress, in which Obama is expected to lay out a specific vision for health care reform:

What we’re hearing that she’s talking about with White House staff is sort of a scaled-back bill that would focus on insurance reforms that both sides could agree to, but would not have a full public option, instead, would have a so-called trigger. What that means in layman’s terms is basically that the insurance companies would have a couple of years to make some dramatic changes. If they do not make those changes, then a public option would be triggered.

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Indeed, a trigger proposal would establish certain benchmarks: if private insurers fail to lower premiums by X% over Y years, then a public plan would enter the Exchange. To convince private insurers of the threat of public competition and maximize the effectiveness of the mechanism, policy makers would begin designing a robust Medicare-like program almost immediately after passing health reform legislation.

The White House’s embrace of Snowe’s proposal signals that it has lost confidence in Sen. Kent Conrad’s (D-ND) co-op compromise, a development that could appease Congressional liberals weary of the co-ops’ ability to lower health care spending. Conservative Democrats may also support a compromise that gives private insurers one final opportunity to lower health care costs without government interference.

The White House hopes “that this would appease liberals by saying it’s not completely off the table. And the big hope is that this could bring along another moderate Republican, like maybe Susan Collins of Maine, some conservative Democrats, like Ben Nelson and Mary Landrieu in the Senate, who don’t want a public option, but would sort of potentially be open to a trigger like this,” Ed Henry said.

This morning, The New Republic’s Suzy Khimm reported that Snowe — a long-time supporter of fairly robust health insurance reforms — may also be willing to push-up the subsidy levels from 300 to 400% of the Federal Poverty Line, include large businesses in the Exchange (under the House bill, large businesses would not be able to enroll their employees in the Exchange until 2017), and do more to prohibit insurers from discriminating against older beneficiaries.

In response to critics who argue that Sen. Chuck Grassley (R-IA) is not negotiating the health care bill in good faith, a Grassley spokesperson issued this statement:

Jill Kozeny, a spokeswoman for Sen. Charles Grassley of Iowa, said the accusations were unjustified. She said Grassley and five other Senate Finance Committee members – half Republicans, half Democrats – will hold their scheduled conference call Friday…Kozeny said Wednesday: “Attacks by political operatives in the White House undermine bipartisan efforts and drive senators away from the table….” She also called Democratic-crafted bills “policy failures and they’ve been rejected at the grassroots.”

Greassley’s summer tour to discredit the Democrats’ health care bill certainly speaks louder than his spokesperson’s commitment to bipartisanship, which Grassley promises to pursue during Friday’s phone call. But will he be looking for genuine compromise or obstruction? In other words, is there a difference between Grassley the politician and Grassley the policy maker?

All signs point to no. During a recent interview with Kaiser Health News, for instance, Grassley indicated that he has not had “any conversations” with Sen. Max Baucus (D-MT) about his recent suggestions that the public option would pull the plug on grandma, refusal to to vote for an “imperfect bill” or statement that “the only way to get a bipartisan agreement is to defeat a Democratic proposal on the first hand.” Grassley said there was “nothing” “that needed to be clarified or straightened out” in his relationship with Baucus.

In fact, the above statement re-affirms Grassley’s commitment to obstructionism. Democratic-crafted bills are “policy failures and they’ve been rejected at the grassroots,” Grassley’s spokesperson says, on the eve of Grassley’s “bipartisan negotiations” about said policies. A more honest broker would have admitted that voters haven’t rejected Democratic-crafted bill; they’ve rejected Republican rumors about the Democratic bills.

Now that the White House is “signaling publicly” that it’s “ready to take charge of the health care debate,” ABC’s George Stephanopoulos offers this dose of hardy centrist conventionalism:

Here are the five key sets of questions they have to confront, both in the Roosevelt Room and in their consultations with Congress:

1 – What is “death with dignity” for the public option? Is it better for the president to sacrifice it himself? Or convince Democratic leaders behind closed doors to come to him? Some will argue for taking the public option issue to the floor, passing it through the House and sacrificing it in conference – but once you’ve gone that far, it may be impossible for House Democrats to back down. So, giving it up on the front end in some fashion is likely the preferred option.

While the politics of the public option are obviously complex, the conventional Washington wisdom surrounding the process and means for achieving health reform is infuriating. Here, Stephanopoulos strategizes the different ways in which Democrats could abandon the President’s signature campaign issue, the most popular and one of the more important element of health care reform and the one “sliver” that has energized the President’s liberal base.

Stephanopoulos believes that rather than fight and defend good policy from the lies and smears of the right and find ways to push the option through, the administration should just give up and move to the center. After all, pleasing American “moderates” and conservatives, and of course the very actors — private health insurers — who have made reform so necessary in the first place, is the key to good politics.

This is Washington centrism at its finest and it mostly applies to Democrats.

This morning on MSNBC’s ‘Morning Joe,’ Rep. Mike Pence (R-IN), Chairman of the House Republican Conference, underscored his rather elementary understanding of health care issues. During the appearance, Pence suggested — as he has in the past — that Americans should purchase insurance across state lines, like all federal employees who purchase their coverage through the Federal Employees Health Benefits Program (FEHBP). Moments later, Pence condemned government-run health insurance exchanges:

Republicans believe that in addition to tort reform what we should allow Americans to do is to purchase health insurance the way members of Congress can, the way all federal employees can and that is to buy health insurance across state lines to get out there and allow new insurance products to be created in a new competitive marketplace…even the private insurance elements in the Exchanges, you know, are essentially government controlled and government dictated.

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Pence’s inconsistency aside, members of Congress don’t cross state lines to shop for health insurance. They purchase their coverage from a national exchange-like program in which the competition of private insurers is closely regulated. In fact, if insurers in the government-run FEHBP operated in the kind of “new competitive market place” that Pence envisions, many elected officials would have trouble affording or even qualifying for health insurance coverage.

Private insurers participating in FEHBP cannot deny coverage to applicants with pre-existing conditions, charge exorbitant out of pocket fees, rescind coverage or discriminate based on gender or age. In Pence’s “new competitive marketplace,” insurers could usurp the consumer protection laws of their respective states and would have little incentive to continue doing business under certain state rules which require companies to follow the rules of the FEHBP; instead, they would “compete” for the youngest and healthiest Americans and exclude sicker patients.

Over the last three years, insurance companies operating in the individual market denied coverage to 12.6 million Americans and under Pence’s reforms, they could exclude far more ‘non profitable’ customers from coverage. Companies would charter in states with scarce regulations, and will no longer have to provide mental health parity, cancer screenings, or abide by regulations that limit the rates that can be charged to higher-cost consumers and that limit who can be excluded for a health plan. Insurers operating in these unregulated states would offer bear bones coverage to attract younger and healthier Americans, leaving states with greater consumer protections — and more comprehensive plans — with a sicker risk pool and higher costs.

When asked which parts of the House bill he favors, Pence, who has previously said that every member of Congress should read the health bill “thoroughly,” was unable to recall any other provision in the 1018 page bill besides the 12 pages devoted to the public option.