Health Care Debate: Will Public Option Die?

Aug. 16, 2009— -- While President Obama spent the day visiting the Grand Canyon with his family and taking a break from the health care battle, back in Washington the debate raged on.

The big question: is the president's plan for a government-run health insurance option dead?

The Obama administration further signaled today that it might be willing to negotiate on the so-called public option provision

First, Secretary of Health and Human Services Kathleen Sebelius said that a government alternative to private health insurance is "not the essential element" of the administration's health care overhaul.

"I think what's important is choice and competition and I'm convinced at the end of the day the plan will have both of those, but that is not the essential element," Sebelius said on CNN's "State of the Union."

Then Sen. Kent Conrad, a moderate Democrat from North Dakota, appeared on "Fox News Sunday" saying: "Look, the fact of the matter is there are not the votes in the United States Senate for the public option. There never has been. So, to continue to chase that rabbit, I think, is just a wasted effort."

So Conrad has come up with an alternative: public cooperatives. These non-profit groups, run similarly to rural electric co-ops would be given several billion dollars of government money to get started and would -- in theory -- compete with insurance companies to offer better and cheaper medical coverage.

Ditching the public option requirement might anger more liberal members of Obama's party, but it might allow him to sway enough Republicans to make his health care overhaul a reality.

But would Republicans go along with public coops?