WASHINGTON -- The Obama administration signaled Sunday it may drop the idea of a publicly financed insurance option as part of a health care compromise.
Health and Human Services Secretary Kathleen Sebelius said the public option "is not the essential element." She said the administration would consider a bill that includes the creation of a not-for-profit insurance cooperative as an alternative to a government-run plan.
"What's important is choice and competition," Sebelius said on CNN's State of the Union.
Taking the public option off the table could lead to friction between President Obama and liberal Democrats who see it as the best way to get to universal coverage. "Without the public option, we'll have the same number of people uninsured," said Rep. Eddie Bernice Johnson, D-Texas, also speaking on CNN.
Sebelius' remarks came a day after Obama called the public option only "one sliver" of the health care plan. At a town hall in Colorado, he chided both conservatives and liberals for becoming so "fixated" on the topic.
Congressional Democrats have been getting pounded this month at town hall meetings over the public option by those who say it would lead to government control of health care.
Sen. Kent Conrad, D-N.D., said on Fox News Sunday that there are not enough votes in the Senate for the public option. One of three Democrats and three Republicans working on a compromise plan, Conrad said the proposed cooperative is "the only plan that has bipartisan support."
An insurance cooperative, Conrad said, would not be "government-run and government-controlled. It's membership-run and membership-controlled."
Opponents of the public plan, including most Republican members of Congress, say it could be used to undersell private insurance companies, driving them out of business. Sen. Richard Shelby, R-Ala., one such opponent, said on Fox News Sunday the insurance cooperative idea is worth reviewing.
"I don't know if it will do everything people want," Shelby said, "but we ought to look at it."
In recent days, several Democrats have urged some within the party to consider compromise on a public plan.
Former president Bill Clinton, who lost his own bid for a health care bill in 1994, told a group of liberal bloggers last week, "I want us to be mindful we may need to take less than a full loaf."
Illinois Sen. Dick Durbin, the Senate's No. 2 Democrat, said last week he is "open" to a bill without a government-run insurance plan. "It doesn't have to be a perfect bill. I don't want this process filibustered to failure."
Throughout the health care debate, Obama has argued that a public plan should be part of an "insurance exchange" that would provide low-cost policies for the uninsured. In a June letter to Democratic committee chairmen in charge of drafting health care legislation, Obama wrote, "I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans."
During his appearance Saturday in Grand Junction, Colo., Obama said a public option is "not going to solve every problem, but I think it actually would keep the insurance companies more honest."
He said the public option "is not the entirety of health care reform," adding that "it's both the right and the left that have become so fixated on this that they forget everything else." For example, Obama cited his proposals to keep insurance companies from refusing coverage for people who are sick or have pre-existing medical conditions.