Health care reform legislation took another big step today when Senate Majority Leader Harry Reid, D-Nev., announced that the Senate version of health care reform will include a public health insurance option — with an opt out clause.

The opt out clause would allow individual states to opt out of the public option.

“As we’ve gone through this process, I’ve concluded, with the support of the White House and Senators. Dodd and Baucus, that the best way to move forward is to include a public option with an opt out provision for states,” Reid said to reporters in Washington D.C.

Senator Olympia Snowe, R-Maine, is the only Republican that many observers feel would vote for any health care reform plan, but she has been skeptical of a bill that includes the public option. Reid indicated that Democrats were willing to go at the bill without Snowe’s vote.

Reid said, however, that he hope “she sees the wisdom of supporting a health care bill.”

Snowe said she was “deeply disappointed” by Reid’s decision to not include a “trigger option” according to Talking Points Memo.

The opt out plan would allow states to opt out by 2014.

White House press secretary Robert Gibbs issued a statement after Reid’s news conference which said, in part:

And while much work remains, the President is pleased that at the progress that Congress has made. He’s also pleased that the Senate has decided to include a public option for health coverage, in this case with an allowance for states to opt out. As he said to Congress and the nation in September, he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition.

New Mexico Senators Jeff Bingaman and Tom Udall, both Democrats, have indicated in the past that they will vote for a health care reform bill that includes a public option.

Bingaman, in fact, voted for a piece of legislation out of the Senate Health, Education, Labor and Pensions committee that included a public option. He also voted for the Senate Finance Committee version of health care reform legislation — a piece of legislation that did not include a public option.