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White house is signaling for compromise on health care plan

17 08 09 - 13:07

Chances Dim for a Public Plan
White House Opens Door to Compromise on Government Role in Health Overhaul

The Obama administration gave its strongest signal yet that it would be willing to compromise on plans to expand the government's direct role in health-insurance coverage as it fights a growing crescendo of opposition to its effort to overhaul health care.

Health and Human Services Secretary Kathleen Sebelius said Sunday that a new, government-run health-insurance program wasn't the "essential element" of any overhaul plan.

Robert Gibbs, the president's press secretary, said President Barack Obama wants "choice and competition" in the insurance market. Mr. Obama "has, thus far, sided with the notion that can best be done through a public option," or government-run plan, Mr. Gibbs said Sunday on CBS's "Face the Nation." However, he said the bottom line is simply that "what we have to have is choice and competition in the insurance market."

A day earlier, President Obama defended the public option at a town-hall meeting in Grand Junction, Colo., while leaving the door open to alternative approaches that expand coverage and reduce costs, but don't increase the federal deficit.

The public option, "whether we have it or we don't have it, is not the entirety of health-care reform," Mr. Obama said. "This is just one sliver of it, one aspect of it."

The comments come after a bruising two weeks in which the president's call for a public plan to "keep insurance companies honest" has been interpreted by Republican opponents and some members of the public as a push to drive private insurers out of the marketplace.

Insurance companies have fought a public plan, objecting specifically to one that would use the government's buying power to negotiate rates. The worry is that hospitals and doctors would charge private companies more to make up for being underpaid by the government. Concerns have also been raised that insurers would be unable to compete with such a plan, and that the public option would be a precursor to national health care.

The implications for consumers of nonprofit health-insurance cooperatives, one alternative way to help individuals and small businesses get coverage, are unclear. Much will depend on how and how quickly the co-ops can organize -- a daunting task that could involve setting up the equivalent of new insurers on a state or regional basis. The savings wrung from this extra competition could help cash-strapped patients, though it is unlikely that the co-ops would bring prices down as significantly as the government could.

Obama administration officials have indicated before that they could support a health-care overhaul without a government-run insurance option. "Nothing has changed. The president has always said that what is essential is that health-insurance reform must lower costs, ensure that there are affordable options for all Americans and it must increase choice and competition in the health-insurance market. He believes the public option is the best way to achieve those goals," Linda Douglass, communications director for the White House's health-reform office, said Sunday.

But as the debate over Mr. Obama's ideas for a health-system overhaul grows more shrill, proponents have indicated willingness to drop some controversial elements in order to get a plan passed.

Aides to Senate Minority Leader Mitch McConnell (R., Ky.), an opponent of the public option, labeled Ms. Sebelius's comments a "shift" on the issue in an email pointing out various occasions on which President Obama had said a health plan should include a public option.

Some liberal advocates interpreted the administration's position as a shift in emphasis, but not away from the public option. Mr. Obama wants to "broaden the conversation so people understand that health-care insurance reform is bigger than just one element," said Jacki Schechner, spokeswoman for Health Care for America Now, a grass-roots campaign for health-care reform.

Ms. Sebelius's comments come as some senior Democrats in the Senate are urging the administration to give up on the idea of a public plan run directly by the government. The House has already passed a bill with a robust public option. But House Democrats might be reluctant to vote for a final bill that includes a government-funded plan -- exposing themselves to attacks from the right -- if the White House appears willing to bargain that away too quickly.

The insurers set to breathe the biggest sigh of relief if the public plan is dropped are Wellpoint Inc., which operates Blue Cross and Blue Shield plans in 14 states, and the dozens of other not-for-profit Blue plans across the country. They are currently the biggest sellers of individual health policies, the kind that would compete with new public or co-op plans. Companies such as Aetna Inc. and Cigna Corp. have less to lose from a public plan as they market mostly to employers.

Robert Laszewski, a consultant at Health Policy & Strategy Associates, said nonprofit co-ops aren't necessarily an easy victory for insurers, though. If they don't work down the road, and the government has to bail them out, they might be a precursor to a stronger government role in health care, he said.

He pointed out that the barriers to entry for new insurers are high: They need to set up information-technology infrastructure, build networks of providers and raise significant capital to hedge against catastrophic claims. A co-op that doesn't navigate those challenges smoothly runs the risk of being shunned by potential customers.

America's Health Insurance Plans, the lobbying group that represents the industry, is also cautious about the idea of co-ops, saying it hasn't seen any details on how such a system would operate. Robert Zirkelbach, a spokesman for the group, said that reforms the insurers have proposed -- such as accepting patients with pre-existing conditions -- are enough to fix the health-care system. "If we do those things, a government-run plan -- including a co-op -- is not necessary," he said.

—Avery Johnson and Vanessa Fuhrmans contributed to this article.
Write to Elizabeth Williamson at and August Cole at




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