WASHINGTON BUREAU — The health bill that goes to the Senate floor next week will include a public plan provision, and a section letting states opt out of using that provision, Senate Majority Leader Harry Reid said today.

Reid., D-Nev., has been working with the White House and with Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Christopher Dodd, D-Conn., on melding the two major Senate health bills together.

Baucus oversaw the development of the Finance Committee’s S. 1796 health bill, and Dodd has been in charge of shepherding the health bill developed by the Senate Health, Education, Labor and Pensions Committee through the Senate.

“I feel good about the consensus that was reached within our caucus and with the White House,” Reid said today at a press conference. “I’ve always been a strong supporter of a public option.”

Having a government-run health plan compete with private insurers through a health insurance “exchange” system is “not a silver bullet,” but it could help increase the level of competition, Reid said.

Reid said would be sending the Congressional Budget Office a version of the Senate health bill to score within just a few hours.

A link to a video of Reid’s press conference is available here.

Sen. Thomas Carper, D-Del., has been a key advocate of letting states opt out of the public option health program and create their own alternatives to private plans.

Sen. Charles Schumer, D-N.Y., talked about the “public option with state opt out rights” concept Sunday on “Meet The Press,” and he also talked about the limits that he thinks should be imposed on a public option plan program. Any public option plan ought to operate on a level playing field with private insurers, and it ought to meet the same state requirements and use similar provider rates, he said.

In some states, especially where few insurers operate, creating a public option “is the only real way and best way to bring costs down,” Schumer said.

“Insurance companies won’t do it on their own,” he said.

The House appears to be close to unveiling its own health bill, and a vote on the House floor could come the week starting Nov. 6. House Majority Leader Steny Hoyer, D-Md., told members Friday to be available Nov. 7, and possibly the Monday and Tuesday before Veterans Day, to vote on health reform legislation.

America’s Health Insurance Plans, Washington, today said it continues to oppose the public option concept.

“A new government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality,” AHIP President Karen Ignagni says in a statement.

“The divisive debate about a government-run plan is a roadblock to reform,” Ignagni says. “It’s time we focus instead on broad-based reforms that will ensure the affordability and sustainability of our health care system.”