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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

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And I'm Michele Norris.

It's quickly becoming the most controversial issue in the debate over reshaping the nation's health care system. Should the government create a new public program like Medicare that would be available to those under age 65?

NPR's Julie Rovner reports.

JULIE ROVNER: All the major democratic candidates for president last year proposed creation of a Medicare-like public plan that would be offered as an alternative to private insurance. Here's how President Obama explained it last month.

BARACK OBAMA: The thinking on the public option has been that it gives consumers more choices and it helps give - keep the private sector honest, because there's some competition out there. That's been the thinking.

ROVNER: The original idea for that public option came from political scientist Jacob Hacker, now at the University of California at Berkeley. He says he's amazed at the outcry it's prompted.

JACOB HACKER: I think it certainly provoked much more fear on the part of private insurers, and providers and conservatives than I would've expected.

ROVNER: That fear from people like Bob Moffit of the conservative Heritage Foundation is that because the public plan, with its ability to set prices, would almost certainly be less expensive, private insurance would simply be unable to compete.

BOB MOFFIT: The public plan becomes basically a Trojan horse for single-payer health care.

ROVNER: That's where the government pays everyone's health bills.

MOFFIT: The single-payer people on Capitol Hill would like to have a single-payer health care system. They don't have the votes to actually do it in broad daylight. So what they want to do is do something like this, create a public plan and simply crowd out private health insurance.

ROVNER: Hacker says that was not his intent, and he doubts that would be the impact.

HACKER: After all, we have a public plan competing with the private plans in the Medicare program, and conservatives have always said that it's a good thing. But suddenly when we talk about doing that for people younger than 65, then, oh no, we can't do this. It's much too complex.

ROVNER: Of course, how much impact a public plan would have on private insurance depends on who's eligible to join and how much it costs. Congress and the president have yet to work that out. But a report out this week from the independent number-crunching Lewin Group gives both sides ammunition.

JOHN SHEILS: You can either create a force to promote competition or you could set up a program where, frankly, private insurance just isn't going to be able to compete. And we would drift into a single-payer system by default.

ROVNER: John Sheils is a co-author of the report. He says if a new public plan was open to everyone and paid the same rates as Medicare, as many as 119 million people would shift from private to public coverage.

SHEILS: And that's an enormous shift. That's 70 percent of all people who have private insurance.

ROVNER: But neither President Obama nor most Democrats in Congress are talking about anything that sweeping. They're mostly talking about a plan with a much narrower target population: workers in small business, the self-employed and people who don't currently qualify for insurance on the job. Sheils said that would produce a much different result, about 32 million people would drop out of private coverage.

SHEILS: Though it's a much smaller impact and it's concentrated among those groups that arguably are having the most trouble getting coverage in today's system.

ROVNER: But that hasn't stopped many Republicans from calling the public plan a showstopper. Political scientist Jacob Hacker says he's seen it all before.

HACKER: Medicare was a socialist plot, according to conservatives when it was proposed in the 1960s and now it's as American as apple pie. And I hope that the public plan, within health care reform, the choice of a public plan for non-elderly Americans will come to seem as American as apple pie.

ROVNER: That's assuming, however, it can win enough support to get enacted first.

Julie Rovner, NPR News, Washington.

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