This excellent Sarah Kliff NYT article is from a few weeks ago, but I missed it the first time around. Here is the clincher:
“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates [for the state’s public option], there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”
Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.
“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”
Nonetheless the piece is interesting throughout, and illustrates some basic dilemmas with health care reform and public options in particular, especially when a sector is controlled by powerful lobbies.