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UPDATED: Senators Reportedly Reach Tentative Deal to Drop Public Option

Breaking news from The Associated Press:

Democratic senators say they have a tentative deal to drop a government-run insurance option from healthcare legislation.

No further details were immediately available.

But liberals and moderates have been discussing an alternative, including a private insurance arrangement to be supervised by the federal agency that oversees the system through which lawmakers purchase coverage. Additionally, talks centered on opening Medicare to uninsured Americans beginning at age 55, a significant expansion of the large government healthcare program that currently serves the over-65 population.

Update: Politico has a little more information. From a breaking news alert:

Senate Democrats have reached a “broad agreement” on a health reform bill, Majority Leader Harry Reid said Tuesday night — a plan that negotiators have said would create a new national health-care plan with private insurers, and a chance for older Americans to “buy in” to Medicare.

2nd Update: TPM’s intrepid Brian Beutler reports that Reid said news reports that “the public option is gone” are “not true.”

3rd Update: The New York Times has more:

Mr. Reid refused to provide details, saying only that the group of 10 senators – five liberals and five centrists – would be sending proposals to the Congressional Budget Office for analysis. The broader Senate Democratic caucus appeared to be in a state of confusion with even some senior party leaders saying they were unaware of any agreement.

But Democratic aides said that the group had tentatively agreed on a proposal that would replace a government-run health care plan with a menu of new national, privately-run insurance plans modeled after the Federal Employee Health Benefits Program, which covers more than eight million federal workers, including members of Congress, and their dependents.

A government-run plan would be retained as a fall-back option, the aides said, and would be triggered only if the new proposal failed to meet targets for providing affordable insurance coverage to a specified number of people.

The agreement would also allow Americans between age 55 and 64 to buy coverage through Medicare, beginning in 2011.

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