Public Option Feels Pressure Amid Opposition

While President Obama's August deadline for House and Senate passage of health care reform will not be met, legislators are hard at work on the matter. A public insurance had been a must-have feature for Obama just a few weeks ago, but as key Republicans and moderate Democrats resist, the White House may have a tough call to make.

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President Obama continued to make the case for a public insurance option today in his health care overhaul. Behind the scenes, though, his staff has been working with lawmakers who are dead set against a public plan. A White House spokesman suggested the president may be open to compromise if that's what it takes to get a bill through Congress.

NPR's Scott Horsley reports.

SCOTT HORSLEY: At a virtual town hall meeting with AARP members today, President Obama noted that it was 44 years ago this week that Congress passed Medicare, providing guaranteed health insurance for everyone over 65. He said many of the same arguments leveled against Medicare back then still dog the health care debate today.

President BARACK OBAMA: I got a letter the other day from a woman. She said, I don't want government-run health care. I don't want socialized medicine. And don't touch my Medicare.

(Soundbite of laughter)

HORSLEY: Mr. Obama noted dryly that Medicare is a government-run health care plan, and a very popular one at that. Throughout the health care debate, Mr. Obama has called for another government insurance plan as one of the options in a retooled health care marketplace. He told AARP members a public plan could have lower administrative costs than a private insurance plan and be more responsive to its clients.

Pres. OBAMA: I think that helps keep the insurance companies honest because now they have somebody to compete with.

HORSLEY: But calls for a public insurance plan have been a huge stumbling block in Congress, where Republicans and some Democrats worry it would have an unfair advantage in competing with private insurers. Some even complained a public option would be a first step on the road towards nationalized health care.

A half-dozen members of the Senate Finance Committee have been meeting privately trying to work out a compromise that could win bipartisan support. Republican Senator Olympia Snowe of Maine says their draft plan does not include the public insurance option.

Senator OLYMPIA SNOWE (Republican, Maine): There are other ways of accomplishing that goal, short of having the federal government being front and center, offering a public plan and totally revamp our health care system in a way that has unintended consequences.

HORSLEY: Once it became clear the full Senate would not vote on a health care bill before breaking for its August recess, the White House turned to a Finance Committee vote as a key sign of progress. In its eagerness for that committee vote, the administration has shown signs it's willing to compromise on the public plan. White House spokesman Robert Gibbs suggested today there may be other ways to achieve the president's goal of a more competitive insurance marketplace.

Mr. ROBERT GIBBS (Spokesman, White House): That's his bottom line on this, is how do we best provide the American people with alternatives, particularly in many markets where there isn't a lot of that choice and competition?

HORSLEY: The president has also given some ground on the question of taxing health insurance. The idea is to raise money and at the same time discourage the excessive use of medical care. During the campaign, Mr. Obama spoke out against taxing ordinary health plans, as rival John McCain suggested.

But Gibbs says the president is open to taxing insurance companies that sell costly so-called Cadillac plans. Gibbs would not pinpoint how expensive a plan would have to be to be subject to such a tax or where to draw the line between a Toyota Camry and a Cadillac.

Scott Horsley, NPR News, the White House.

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