- The Washington Times - Monday, August 17, 2009

In the face of strong public criticism at town-hall meetings and skepticism on Capitol Hill, Obama administration officials said Sunday that the president is willing to accept a health care proposal that includes nonprofit health insurance cooperatives rather than insist on a government-run insurance program.

The move was a major concession to conservative Democrats and moderate Republicans that quickly won applause from several lawmakers concerned that reform efforts were being sunk by fears that such a federally subsidized program would lead to a government takeover of health care.

“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,” Sen. Kent Conrad, North Dakota Democrat, said on “Fox News Sunday.” “So to continue to chase that rabbit, I think, is just a wasted effort.”

Some prominent liberal Democrats, including House Speaker Nancy Pelosi of California, reiterated their faith in the public option. Rep. Eddie Bernice Johnson of Texas said it would be “very, very difficult” to win her support for a bill that did not include a public option.

Spokesmen for the top two Republicans on Capitol Hill were cautious when asked for reactions Sunday afternoon.

Health and Human Services Secretary Kathleen Sebelius and White House press secretary Robert Gibbs appeared on Sunday’s political talk shows to say that what the president wants is to introduce competitors to private insurance plans, and whether this is done by a government-run insurance program or private cooperatives is not important.

Mrs. 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, though she promised that the final version of the bill would improve “choice and competition” for consumers.

“I think there will be a competitor to private insurers,” she said. “That’s really the essential part … 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.”

Mr. Gibbs spoke similarly on CBS’ “Face the Nation” on Sunday, saying Mr. Obama’s goal is to offer more “choice and competition” for Americans seeking health care insurance.

“The president has thus far sided with the notion that that can best be done through a public option,” Mr. Gibbs said. “The bottom line for this for the president is, what we have to have is choice and competition in the insurance market.”

Mr. Gibbs added that, if the government does expand its role as a health care provider - as it already does for millions of seniors and low-income Americans through Medicare and Medicaid - it will not kill the private insurance market.

“I don’t think [Mr. Obama] was saying that what we were going to do is create the Postal Service for health care,” Mr. Gibbs said. “The president has talked about [how] health insurance reform will build on the way that millions and millions Americans receive their health insurance. That is through their employer-sponsored system.”

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.

As recently as Mr. Obama’s July 18 weekly address, the president said that any plan he signs must include an insurance exchange, “including a public option to increase competition and keep insurance companies honest.”

But many Republicans and conservative Democrats oppose this. They say it would add to the nation’s already hefty deficit and that such a program, which likely would be subsidized by the government and definitely would not have to turn a profit as private companies must, would therefore drive private enterprise out of the insurance business, leading to a de facto government takeover of health care.

But in recent weeks the notion of a not-for-profit national health care cooperative has been receiving more attention on Capitol Hill. The compromise calls for establishing “co-ops” across the country that would compete with private insurance companies.

Mr. Conrad, who has helped develop the co-op alternative, said it has been a successful business model in the United States for years. He called it “the only plan that has bipartisan support in the United States Senate.”

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

Sen. Richard C. Shelby, Alabama Republican and 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 welcome “step away from the government takeover of the health care system.”

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

But members of the liberal wing of the Democratic Party said Sunday, after the White House officials spoke, that it will continue to press for the public option as the best solution to cover the uninsured.

A spokesman for Mrs. Pelosi offered no indication Sunday that the House speaker was ready to accept the co-op plan.

“The speaker’s support for a public option is clear,” read the entirety of a statement from spokesman Drew Hammill.

Ms. Johnson, a former chairwoman of the Congressional Black Caucus, said she and her liberal colleagues will continue to press Mrs. Pelosi and the White House for a government-run option.

“Without the public option, we’ll have the same number of people uninsured. If the insurance companies wanted to insure these people now, they’d be insured,” Ms. Johnson said on CNN’s “State of the Union.” “The only way that we can be sure that very-low-income people and persons who work for companies that don’t offer insurance can have access to it is through an option that would give the private insurance companies a little competition.”

When asked whether she thought it was more important to enact health care reform this year or to slow down the legislative process to try to win Republican support, Ms. Johnson responded, “I don’t know if we can get them on board.”

The House Energy and Commerce Committee in late July passed a health care overhaul bill that includes a public option. The bill is set for a full vote on the House floor soon after Congress returns from its summer break in early September.

But Rep. Mike Ross of Arkansas, a member of the conservative Democratic Blue Dog coalition, said the Senate Finance Committee - which has taken the lead on drafting the upper chamber’s version of the bill - ultimately will have the final say on the measure’s final form.

“I know a lot of members in my party in the House don’t want to hear this, but the reality is that what comes out of that conference report, which is what really matters, my guess is about 90 percent of it will be reflected from what’s in the Senate Finance Committee bill,” he said on “State of the Union.”

Senate Majority Whip Richard J. Durbin, Illinois Democrat, said on CNN on Aug. 9 that he would be willing to support health care legislation without a public option. But he added that even if the Senate passes a health care reform package without a public option component, Democrats, who control both chambers of Congress, still could insert the provision during negotiations between House and Senate versions of the bill.

Durbin spokesman Joe Shoemaker declined to say Sunday whether the senator would support a co-op option and allow a final version of the bill to be sent to Mr. Obama without a public option.

“I’ll let what Sen. Durbin has said previously stands,” he told The Washington Times.

Spokesmen for several ranking congressional Republicans said that while the concept of a health care co-op has merit, it’s too early in the debate to say whether they would support such a plan.

A spokesman for Senate Minority Leader Mitch McConnell, Kentucky Republican, said “it depends on how it’s set up.”

“If it’s a government plan under a different name, it’s not going to get support; it will be like having another Fannie and Freddie,” said spokesman Don Stewart, referring to Fannie Mae and Freddie Mac, the troubled government-sponsored companies that either guarantee or own almost half the nation’s mortgages.

Michael Steel, a spokesman for House Minority Leader John A. Boehner, Ohio Republican, said “there is a lot of concern that co-ops would simply be a gateway drug to government-run health care,” but he added, “It’s hard to comment on a proposal no one has seen.”

Jill Gerber, a spokeswoman for Sen. Charles E. Grassley of Iowa, the Senate Finance Committee’s top Republican who has strongly opposed the public-option plan, said the senator is interested in the co-op approach, though she added that it “all depends on details and how things unfold.”

The replacement of a government option with private cooperatives has the potential to change the health care debate. Without the possibility that a public option would lead to government being the only health care provider, many of the most politically powerful Republican criticisms of the various plans - long waiting lines in socialized health care systems and the specters of government “death panels” and rationing of end-of-life care - would be undercut.

Indeed, some liberals who favor a single-payer, government-run system in theory said they could support a federal option in exactly the hope that government would drive out private insurance. For example, Rep. Barney Frank, Massachusetts Democrat, told a member of the group Single Payer Action in an impromptu conversation, “I think that if we get a good public option, it could lead to single-payer, and that is the best way to reach single-payer.”

In the video, displayed on YouTube.com, Mr. Frank assures his interlocutor that he would like the government to fund all health care but warns that “saying you’ll do nothing till you get single-payer is a sure way never to get it. … I think the best way we’re going to get single-payer, the only way, is to have a public option and demonstrate its strength, its power.”

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