Are Dems Losing the Battle Over a Public Option?

ABC News' Kristina Wong reports: Whether the anger Americans express at town halls is real, manufactured, or as Sen. Arlen Specter, D-Penn., 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 importance of a public option in health care reform, envisioned as a government-run health care insurance system aimed at providing affordable health insurance to the almost 50 million uninsured Americans, that would also force the private insurance industry to lower costs to remain competitive. But today, the public option gave way to the importance of “choice” and “competition.”

“That is not the essential element,” Health and Human Services Secretary Kathleen Sebelius said on CNN’s “State of the Union” when asked about the 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 was asked whether a public option be 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, likely to come out of a Senate Finance Committee bill.

“We don't know is 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,” said Sebelius.

But as Sen. Kent Conrad, D-ND, said on Sunday, the president may have little choice but to drop the public option, 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 — Senate Budget Committee Chairman and member of the “Gang of Six” – a bipartisan group of senators, touted a health care ‘co-op' as a compromise solution.

“It's not government-run and government-controlled.  It's membership-run and membership-controlled. 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,” said Conrad.

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

Sen. Richard Shelby, top Republican also on the Senate Budget Committee said he would be open to the idea of a co-op.

“Well, I think that's something we should look at. We already have a lot of those, or something like them, nonprofit, basically, that seem to work.  I don't know if it will do everything people want, but we ought to look at it.  I think it's a far cry from the original proposals,” Shelby said on FOX.

While Republicans and Americans anxious about a “government takeover” may be assuaged by the dropping of a “public option” from any Senate bill, the President faces flak from House Democrats, whose bill included a public option.

“Without the public option, we'll have the same number of people uninsured.  If the insurance companies wanted to insure these people now, they'd be insured.  The only way that we can be sure that very low-income people and persons who work for companies that don't offer insurance can have access to it is through an option that would give the private insurance companies a little competition,” Rep. Eddie Bernice Johnson said on CNN.

The House bill, H.R. 3200, also includes controversial “end of life care” consultations, which would reimburse doctors for discussing end-of-life arrangements with patients, but which some critics have characterized as “death panels.”

ABC’s Jake Tapper pressed Sebelius on whether “end-of-life care” consultations would have to be included in a final health care reform bill.

"It's been turned into this scare tactic and probably will be off the table," Sebelius said. “I'm hoping that, at the end of the day, that it will be part of the overall package,” she said.

But Conrad says the idea was beyond life-support in the Senate, confirming that end-of-life consultations were no longer part of the discussions amongst the Gang of Six.

“There should be no mandatory requirement for end-of-the-life counseling,” Conrad said on FOX. “There are some who are asserting that there would be — there could be — mandatory requirements.  There are not now and there will not be.”