Sebelius: Government-run insurance plan ‘not essential’

The Obama administration’s health secretary said Sunday that the president is willing to accept nonprofit insurance cooperatives rather than a government-run option as part of health-overhaul legislation, a major concession that could attract the support of some conservative Democrats and moderate Republicans who now oppose the effort.

Health and Human Services Secretary Kathleen Sebelius said on CNN’s “State of the Union” that while President Obama “continues to be very supportive of some options for consumers” in the health insurance market, a government-run public-option plan is “not the essential element.”

“I think the president is just continuing to say, let’s not have this be the only focus of the conversation,” she said.

She added, however, that she is “convinced at the end of the day the plan will have both” choice and competition for consumers.

“I think there will be a competitor to private insurers,” she continued. “That’s really the essential part, is you don’t turn over the whole new marketplace to private insurance companies and trust them to do the right thing. We need some choices; we need some competition.”

Meanwhile Sunday, a key Senate Democrat in the health-care debate said Mrs. Sebelius and the administration were acknowledging political reality — that a government plan would not pass the upper chamber.

“Look, the fact of the matter is there are not the votes in the United States Senate for the public option. There never have been. So to continue to chase that rabbit, I think, is just a wasted effort,” said Sen. Kent Conrad, a North Dakota Democrat who developed and has been pushing a plan that relies on health-care cooperatives to compete with private insurance companies.

He called it “the only plan that has bipartisan support in the United States Senate.”

Until now, the administration has insisted that a government-run health insurance plan is vital to help cover the almost 50 million Americans without medical insurance. Republicans and many conservative Democrats oppose the plan, saying it would lead to an eventual government takeover of the health insurance industry and increase the nation’s already hefty debt.

But in recent weeks the notion of a not-for-profit co-op has been floated by some on Capitol Hill as an alternative to the public option that would offer consumers choice and competition as well as helping bring down the costs of private insurance.

Mr. Conrad, who has been critical of the administration’s push for a government-run health insurance option, helped devised the co-op plan because, he said, co-ops are a proven successful business model in the United States.

“This is a model that works,” he said on “Fox News Sunday.” “It’s not government-run and government-controlled. It’s membership-run and membership-controlled.”

Sen. Richard C. Shelby, Alabama Republican, who is a vocal opponent of the administration’s proposed health-care overhaul, said Sunday that the co-op plan is something worthy of consideration.

Mr. Shelby said on “Fox News Sunday” that the co-op option would be a welcomed “step away from the government takeover of the health care system.”

“That’s something we should look at,” he said.