Sen. Reid indicates support for a public option that is privately-run.

harryreid1“We have a problem in America and it’s called the private insurance industry,” Senate Majority Leader Harry Reid (D-NV) said in a private meeting with health care providers this week. While Reid recognizes the problem, he isn’t fully supportive of the solution President Obama, the Senate HELP Committee, and the House are pushing — which is, a public health insurance option that competes with private insurers and keeps them honest. The Nevada Senator said he “doesn’t think the public option ought to be a government run program like Medicare,” but instead favors a “private entity that has direction from the federal government“:

“I’ve told people, whoever will listen, that I am in favor of the public option,” Reid said, adding he thinks it’s essential in order to provide competition for private insurance companies that are exempt from anti-trust laws. “We’re working now to try to come up with a program that would allow that to take place.”

Reid went on to say that most people “misunderstand” a public option as “some government run program.”

“But there are many ways we can do it,” he said. “One would be to have an entity like Medicare. I really don’t favor that. I think what we should have is a private entity that has direction from the federal government.”

Reid did not elaborate further on what that would look like.

A Reid spokesman explained to TalkingPointsMemo that Reid is expressing his support for a co-op, an idea proposed by Sen. Kent Conrad (D-ND) that is finding support in the Senate Finance Committee. Reid “is willing to consider a co-op if he is shown it works to make insurers honest,” spokesman Jim Manley said.