Liberal Democrats unhappy with healthcare shift
By John Whitesides John Whitesides – 25 mins ago
WASHINGTON (Reuters) – Liberal Democrats warned President Barack Obama on Monday that a retreat on support for a government-run health insurance plan could endanger passage of major healthcare reform in Congress this year.
The White House signaled over the weekend it was not wedded to Democratic plans for a public insurance option, which has spurred intense Republican opposition, as long as the final healthcare measure created more choices for consumers and competition for insurers.
"You can't have reform without a public option," Howard Dean, a former Democratic National Committee chairman and a vocal supporter of an overhaul, said on CBS's "Early Show."
"I don't think it can pass without the public option," Dean said. "There are too many people who understand, including the president himself, the public option is absolutely linked to reform."
The backtracking over the public insurance proposal lifted shares of managed care companies and relieved investors who feared companies could not compete with such a plan.
Health and Human Services Secretary Kathleen Sebelius said on Sunday a public option was "not the essential element" of any overhaul, and that non-profit cooperatives being considered by a Senate panel could also fulfill the White House goal of creating more competition on insurance.
The shift could pick up a few additional Republican votes in Congress and ease criticism that Obama wants a government takeover of healthcare. But it comes at the risk of alienating key Democratic supporters who could torpedo the overhaul drive.
Democratic Representative Anthony Weiner of New York, who backs a public option, said in a statement "leaving private insurance companies the job of controlling the costs of healthcare is like making a pyromaniac the fire chief."
Obama has repeatedly stated a preference for a government-administered public insurance plan that would create competition for insurers. But in Colorado on Saturday he said the public option "is just one sliver" of healthcare reform.
Obama says the healthcare overhaul would rein in costs, improve care and extend coverage to most of the 46 million uninsured Americans. But the measure has run into stiff opposition from Republican and conservative groups and some elements of the healthcare industry.
SIGNS OF COMPROMISE
Republicans argue a public plan would unfairly compete with private plans and would cripple the insurance industry.
Six members of the Senate Finance Committee -- three from each party -- have been negotiating a reform package that would feature member-controlled non-profit cooperatives instead of the government-run plan.
Members of the cooperatives would join together and purchase insurance for themselves.
Democratic Senator Kent Conrad, one of the so-called "Gang of Six" negotiators, said there are not enough votes in the Senate to pass a bill that includes a public option.
"To continue to chase that rabbit, I think, is just a wasted effort," he said on "Fox News Sunday."
The debate over healthcare reform will resume in Congress when lawmakers return to work in September after a month-long recess, but it is unclear whether dropping the public option would attract enough Republican votes to ensure passage or alienate enough Democrats to endanger it.
Republicans were pleased by the signs there might be a shift, however, although some questioned whether the co-ops would be another form of a public option.
"I am heartened by what the secretary of health and human services said yesterday, that she doesn't think necessarily that a government takeover of health care is a necessary component," Representative Eric Cantor, the second-ranking Republican in the House of Representatives, said in a CNBC interview.
The insurance industry also was pleased. Shares of health-insurance companies rose.
The S&P Managed Health Care index of large U.S. health insurers increased 4.2 percent. UnitedHealth Group Inc shares rose 4.4 percent, WellPoint Inc jumped 3.8 percent, Aetna Inc increased 4.7 percent, and Coventry Health Care rose 6.8 percent.