Blue Dog Democrats, many of whom represent rural districts where Medicare reimbursement rates are low, vehemently oppose tying the public option to Medicare.

Rep. Mike Ross (D-Ark.) and a group of fellow Blue Dogs had negotiated a deal with Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) in July that would remove the link to Medicare. Under that plan, officials with the government-run plan would negotiate individually with providers.

That move, which drew howls of protest from liberal members, prevented the bill from getting stuck in committee. But Ross returned from the August break saying he couldn’t support a public option under any circumstances, essentially withdrawing his support for the deal.

Pelosi is now effectively withdrawing her support. In leadership meetings last week, she said the public option in the House bill should be linked to Medicare.