Obama Signals Public Option Could Be Dropped

Some argue that healthcare cooperatives are better than a public option.

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Fueling the latest debate today over the Obama administration's proposed healthcare reform is whether the president would forgo a government-sponsored public insurance option to push his deal through Congress.

Called a public option, the idea is backed by some liberals as a way to keep private insurance companies honest on price and quality.

The Obama administration signaled over the weekend that the option could be dropped.

"The public option, whether we have it or we don't have it, is not the entirety of healthcare reform. This is just one sliver of it. One aspect of it," President Barack Obama said in a town hall meeting Saturday in Colorado.

Health and Human Services Secretary Kathleen Sebelius said Sunday that the government alternative to private health insurance is "not the essential element" of healthcare reform. White House Press Secretary Robert Gibbs, sent a similar message on CBS's Face the Nation, saying that the president "will be satisfied" if the private insurance market has "choice and competition."

The possible concession to Republican critics could garner more support from the right but could alienate some of Obama's liberal supporters.

Former Democratic Party Chairman Howard Dean said this morning that the healthcare bill isn't worth passing without the public option. "There are too many people who understand, including the president himself, the public option is absolutely linked to reform," Dean said on CBS's This Morning.

He cited two public health programs, Medicare and the Veterans Health Administration system, in defense of the idea.

But the Obama administration hinted this weekend that it is considering an alternative to the public option: nonprofit health cooperatives.

Proposed by Democratic Sen. Kent Conrad of North Dakota, the consumer-owned nonprofit health cooperatives would sell insurance to compete with the private industry, similar to the way electric and agriculture co-ops operate. The co-ops would operate under a national structure with state affiliates, independent of the government, although plan would get $3 billion to $4 billion in initial support from the government.

Supporters of the alternative argue that it would provide the same kind of competition as the public option without the stigma of a government takeover of healthcare.

"The fact of the matter is there are not the votes in the United States Senate for the public option," Conrad said on Fox News Sunday. "There never have been. So to continue to chase that rabbit, I think, is just a wasted effort."