Backers, Critics Battle Over Health Care Public Option

Liberal Democrats are making public their displeasure over the Obama administration's apparent willingness to abandon a public option for the nation's health care system.

In a letter Monday to Health and Human Services Secretary Kathleen Sebelius, the co-chairs of the Congressional Progressive Caucus and the head of the Congressional Black Caucus said a public option is pivotal in any overhaul of the nation's health care system. Some 60 lawmakers signed the letter.

"For health care reform to effectively work, you [need] a public option, with Medicare as its provider network," Rep. Raul Grijalva (D-AZ), who signed the letter, tells Robert Siegel.

Grijalva says his allies see the public option as key to controlling costs, getting private insurance companies under control and providing the American people a Medicare-like program. Without it, he says, the system would remain much the same — and he would consider voting against such a measure.

"Replicating what we have now to the tune of an extra $1 trillion without a public option? Yes, I could see myself opposing that," Grijalva says.

But the public option has run into opposition from moderate Democrats in the Senate.

Sen. Kent Conrad (D-ND) told Siegel on Monday that for any health care measure to pass the Senate, it cannot include a government-run, public insurance plan.

Opposition also comes from outside groups, including America's Health Insurance Plans, a lobbying group for the nation's health insurance companies. Its president and CEO, Karen Ignagni, tells Siegel the program would shift costs the way existing federal health care programs do.

"Right now, Medicaid is paying 65 cents on the dollar; for Medicare, it pays 85 cents on the dollar," Ignagni says. "The way the Medicare and Medicaid programs are sustained, because they underpay physicians and hospitals, is those physicians and hospitals charge the private sector more."

Ignagni favors another aspect of the proposed health care overhaul: the individual mandate, a requirement that all Americans buy health insurance. She calls it "key to making the whole system work."

"It's not that the insurers are assuming the risk; it's that the population is codependant, if you will," she says. "Right now, we have a system where people are subsidizing the folks who do not participate."

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