By Catherine Dodge and Edwin Chen
Aug. 18 (Bloomberg) -- President Barack Obama is facing pressure from fellow Democrats after a top administration official suggested the president may back down from including a federal insurance plan in a U.S. health-care overhaul.
“There is strong support in the House for a public option,” House Speaker Nancy Pelosi of California said yesterday. “A public option is the best option to lower costs, improve the quality of health care, ensure choice and expand coverage.”
Other Democrats called on the president to stand by his commitment to create the government-run plan to compete with private companies, saying they wouldn’t be able to support any health-reform measure that lacked such an option.
Representative Maxine Waters of California said she was “very troubled to hear that after months of negotiations, supposedly moving toward meaningful health-care reform, the public option may in fact be off the table.”
Republicans and some Democrats oppose the creation of a federal plan, saying it would undercut private insurers and give the government too great a role in health care. Lawmakers have fielded questions on the topic from constituents at town-hall meetings throughout the nation during their August recess. Legislation approved by three House committees and one Senate panel includes a government-run health plan.
Not ‘Essential’
Obama’s Health and Human Services Secretary Kathleen Sebelius suggested on Aug. 16 the administration may be retreating from the plan, saying that providing citizens with the alternative of government-run insurance isn’t vital to the health-care overhaul.
“What’s important is choice and competition,” Sebelius said on CNN’s “State of the Union.” The public option itself “is not the essential element.”
White House press secretary Robert Gibbs said the administration’s position is unchanged. Obama would like to include a government-run program as an option for consumers in a proposed health-care overhaul, Gibbs said yesterday.
“His preference is a public option,” Gibbs told reporters on Air Force One. “If there are other ideas, he’s happy to look at them.”
All six companies in the Standard & Poor’s managed care index rose yesterday, ranging from Aetna Inc.’s 4.7 percent increase to a 1.5 percent gain for Minnetonka, Minnesota-based UnitedHealth Group Inc., the largest U.S. health insurer.
‘Less Than Dire’
“Given the market has been pricing in a very dire situation for the insurers, anything less than dire is a positive,” said Les Funtleyder, a health-care strategist with Miller Tabak & Co. in New York.
For Obama, the support of centrist Democrats in the Senate as well as a group of House lawmakers who have raised concerns about the $1 trillion cost of the overhaul is crucial. Yet he risks losing members of his party who advocate for a strong public plan.
“This is very much a thread-the-needle kind of legislative process,” said Democratic consultant Peter Fenn. “There are a lot of people who are going to be very disappointed if it turns out this doesn’t have a public option.”
Senator Jay Rockefeller, a West Virginia Democrat, said a public plan “is the only proven way to guarantee that all consumers have affordable, meaningful and accountable options.”
‘Deal-Breaker’
Omitting the government plan “is a deal-breaker for many Democrats,” said Stuart Rothenberg, editor of the nonpartisan Rothenberg Political Report in Washington.
The administration wants to “find a way to say that they will support a public option at some point and bring the Democratic base along with them,” Rothenberg said.
Obama, who has made the public option a central component of a health revamp, sounded a similar theme as Sebelius on Aug. 15 at a town-hall meeting in Grand Junction, Colorado.
“The public option, whether we have it or we don’t have it, is not the entirety of health-care reform,” he said.
He has asked Congress to complete action this year on a health-care plan that would expand coverage to millions of uninsured Americans and curb medical costs that make up about a sixth of the nation’s economy. Polls show Americans increasingly disapprove of the legislation.
While shedding the public option may allay some concern, it risks generating opposition from the 83-member Congressional Progressive Caucus.
The group’s co-chairman, Representative Raul Grijalva, an Arizona Democrat, said he won’t support a measure that doesn’t have a government plan. Health-care reform can’t happen “without a robust public option,” he said in a statement.
Room to Maneuver
Still, Charlie Cook, publisher of the nonpartisan Cook Political Report, said the flap may give Obama room to maneuver.
“This may make compromise a lot easier than a month or two months ago,” Cook said. “The silver lining of the town-meeting food fights is that many liberals now have a sense of the difficulty, the political pushback that a public option and other ambitious aspects create.”
As one alternative, the Senate Finance Committee is discussing cooperatives, or networks of health-insurance plans owned by their customers, that would get started with government funds as an alternative to the public plan.
Representative Eddie Bernice Johnson, a Texas Democrat, said a cooperative plan concerns her.
“I just want to know what they have in mind as a substitute for a public plan,” she said. “Without that option, I don’t understand where the change is going to come.”
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