The Senante Finance Committee rejected two Democratic proposals for a government insurance plan Tuesday, according to the New York Times.
The vote comes as a major setback for President Obama, who has campaigned for the public option as a way to "keep insurance companies honest."
The first proposal was put forth by John D. Rockefeller of West Virgina and rejected by a vote of 15-8. All Republicans on the panel voted "no" along with five Democrats.
The second proposal, by Charles E. Schumer of New York, was beaten 13-10.
The Financial Committee is the last step before the legislation could be discussed in the full House and Senate, according to CNN.
"A Government-run plan will ultimately run private insurers out of business," Republican Sen. Chuck Grassley of Iowa said.