Are Dems Losing the Battle Over Public Option?

Whether the anger expressed at town halls is real, manufactured or, as Sen. Arlen Specter said today on ABC's "This Week," "not really representative of America," it is clear that many Americans are apprehensive about what a health care overhaul means for them.

This Sunday, Team Obama attempted to allay Americans' fears, but also backed away from whether a final health care reform bill had to include a "public option", which has become a sticking point in bipartisan cooperation over health reform.

President Obama has stressed the need for a public option, envisioned as a government-run health insurance system that would provide affordable health insurance to almost 50 million uninsured Americans, and cause private insurers to lower their costs in order to compete. Critics say it would lead to a government takeover of health care, undercut the private insurance market, and lead to government rationing of health care.

Today, rhetoric in favor of a public option gave way to the importance of "choice" and "competition."

Video of protesters outside of Obamas event at the VFW in Phoenix, Arizona.

"That is not the essential element," Health and Human Services Secretary Kathleen Sebelius said on CNN's "State of the Union" when asked about a public option. "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."

Similarly, Press Secretary Robert Gibbs deflected when asked whether a public option was a "deal-breaker" for the president.

"What the president has always talked about is that we inject some choice and competition into the private insurance market," he said on CBS's "Face the Nation".

"The president has thus far sided with the notion that can best be done through a public option," Gibbs said, but added, "The bottom line again is, do individuals looking for health insurance in the private market have choice and competition? If we have that, the president will be satisfied."

Both Gibbs and Sebelius left the door open for an alternative to a public option.

"We don't know exactly what the Senate Finance Committee is likely to come up with. They've been more focused on a co-op, not-for-profit co-op as a competitor as opposed to a straight government-run program," Sebelius said.

Goodbye Public Option, Hello Co-Op

But Sen. Kent Conrad, D-N.D. said the president may not have any choice if he wishes to have a bipartisan bill.

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

Instead, Conrad -- who is the Senate Budget Committee chairman and member of the "Gang of Six," a bipartisan group of senators -- touted a compromise solution: the "co-op."

"It's not government-run and government-controlled. It's membership-run and membership-controlled," he said. "But it does provide a nonprofit competitor for the for-profit insurance companies, and that's why it has appeal on both sides. It's the only plan that has bipartisan support in the United States Senate."

The government would provide seed money for such a co-op in order for it to fulfill the requirement that every health insurer hold a certain amount in reserve, but after that, be "membership-run, membership-controlled."

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