Public Insurance May Prove Concept Sticking Point Health Care Reform

The insurance industry and some Republicans - like Senator Charles Grassley of Iowa - have already suggested that the public insurance option could be a "deal-breaker." But one of President Barack Obama's health care top advisers, said Wednesday she believes it is still viable and said the president wants it to be a part of health care of any deal in an effort to maintain the private sector "honest".

"I'm very optimistic we will be able to reach agreement on this point," Nancy-Ann DeParle, head of the White House, Office of Health Reform, said in a briefing the Kaiser Family Foundation in Washington. "It is part of the president ... and that is why he wanted to include a mechanism to reduce costs and maintain the competitive private sector honest by having a public plan from there."

There are no details on how a model public insurance is designed to help cover part of the nation, the estimated 46 million people uninsured. But a number of experts in health care have already suggested that it could bear at least some resemblance to Medicare by allowing the government to negotiate lower prices for doctors, hospitals and providers and reduce the cost premiums for consumers.

This has alarmed the private insurers who say they simply could not compete on an equal footing and losing too many customers to the government.

DeParle and Kathleen Sebelius, who was appointed to head the Department of Health and Human Services, are among the officials directing the efforts of the Obama administration to pass a major new series of healthcare reforms. Wednesday, DeParle was careful not to draw hard lines in the sand on the public insurance option.

Instead, it suggests the contours of a possible compromise that could keep the concept of the combination.

She said a government plan "may operate by rules of payment that are similar to the disease."

But it also said it could also borrow elements of the state employee plans. In this model, the government could fund an option that is administered by private insurers and the government to pay comparable rates to the private market. But the government would still save money through lower administrative costs.

"So there are different breeds of plans that could be part of it," said DeParle. The goal is, "how do ... we ensure that people who are choosing a health insurance plan and seek the things that are low cost and which are competitive and have choices. I think that is what we research. "

The president of the insurance industry's trade group said she was encouraged by the remarks of DeParle.

"I think Nancy-Ann's comments this morning have been very serious in thinking more and more that some (public insurance) plan using the rates of illness could be affected," Karen Ignani, the CEO of America's Health Insurance Plans, told the NewsHour. "It is a recognition that there are many ongoing discussions around this."

Ignani also said that a plan that too closely aligned Medicare payment rate too difficult private insurers.

"Currently, there are subsidies in place in the private sector for sub-disease on the coast," Ignani said. "If the government uses the rate of illness, a (recent Commonwealth Fund) study revealed that 120 million people will leave the private system and go directly to the public sector in less than three years. "

For its part, DeParle, who meets regularly with members of Congress on Capitol Hill, some Republicans suggested May not be opposed to an insurance option as announced. While some are clearly opposed to philosophical grounds, DeParle said others are more concerned with the mechanics of how it works.

"It was interesting talking to people who say" Oh, I'm not like a government. "When you start to talk about what that might look, you realize that you are talking about two different things."

DeParle also acknowledged that the White House and Congress are just beginning to negotiate how to pay for health reforms that the measure could cost over $ 1 trillion over 10 years. But it said tax revenues are not the only way to fill the hole.

"There are many scoreable savings in the budget and in care more intelligent," she said, adding that the administration is seeking "the right combination of savings and revenue."

DeParle, who has worked with state and federal level and has served as board member of many private companies, also told reporters she believes that the pace of work on health care reform is better than it was 15 years ago.

"At the end of summer or early fall of 93, there were probably more than a dozen bills in Congress," said DeParle, who served in the Clinton administration. "But there is not really the kind of commitment that we see this year from the committee chairs or staff working on a bill. May you think this Congress is a playground. We meet almost every day ... This work is very active what is happening. " (The Onlines NewsHour)