Oct. 22 (Bloomberg) -- Senator Olympia Snowe said she won’t support the immediate creation of any government-run insurance program and raised the possibility that legislation overhauling the health system won’t be completed this year.

“A public option at the forefront really does put the government in a disproportionate position with respect to the industry,” Snowe, the only Republican so far to vote for health-care legislation, said on “Political Capital With Al Hunt,” which airs this weekend.

Snowe’s vote is crucial because her support would decrease the chances of Democrats such as Nebraska Senator Ben Nelson and Arkansas Senator Blanche Lincoln bucking their party. She might also bring along more Republican backing, from fellow Maine Senator Susan Collins or Ohio Senator George Voinovich.

With so many complex issues to parse, lawmakers may need more time to finish the legislation, Snowe said.

“Christmas might be too soon,” she said. “We should give it the time it deserves.”

Senate Majority Leader Harry Reid is now combining a measure passed by the Senate health committee in July with an $829 billion proposal approved by the Senate finance panel on Oct. 13 with Snowe’s vote.

All the proposals aim to curb medical costs and cover tens of millions of uninsured Americans in different ways. Lawmakers are grappling with whether to require that employers cover workers, whether to create a government-run insurer, or public option, and how to pay for all the changes.

Snowe’s Trigger

Republicans largely oppose the public option and it has divided Democrats. While Snowe said she doesn’t like to use the term “dealbreakers,” she said she opposes it, preferring a plan that would trigger a public option only if there isn’t enough competition for private insurers to keep rates low.

Snowe said she is meeting with Reid and centrist senators including Collins to sort out issues with the legislation. “It’s going to take a great deal of time,” she said.

Health insurer stocks jumped today, with the Standard & Poor’s index of 13 managed-care companies rising as much as 3 percent before closing with a 2 percent gain. The index has lost 10 percent in the past month even as other industries gained.

60 Votes

Senate Democrats control 60 votes, the number needed to avoid Republican stalling tactics and pass major legislation if they stick together. And some Republicans, including South Carolina Senator Jim DeMint, have said it might be best to just work against Democrats and hope they fail.

That’s what happened in 1994, when Hillary Clinton and former President Bill Clinton failed to pass their health-care plan and Democrats lost control of Congress. Snowe said she understands the political calculus used by some Republicans, yet disagrees.

“I don’t see it as a bonanza,” she said.

“The question is whether or not you’re willing to be sitting at the table or being a bystander,” she said. “I think it’s important for Republicans to be at the table.”

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net; Catherine Dodge in Washington, at Cdodge1@bloomberg.net;

Last Updated: October 22, 2009 16:18 EDT