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White House Backs Off Public Healthcare Option
LOS ANGELES TIMES: Obama and officials say it is not 'essential' to the overhaul. Insurance exchanges or cooperatives would be likely to replace it.

Reporting from Washington - The Obama administration signaled Sunday that it was on the verge of abandoning a government-run insurance option in its healthcare overhaul -- a bow to political reality and a big win for insurers.

But some experts said that may not completely relieve pressure on insurers to deliver cost savings.

Both Health and Human Services Secretary Kathleen Sebelius and White House Press Secretary Robert Gibbs said on Sunday talk shows that a government insurance option was not essential -- one day after President Obama himself said as much.

Private-sector options, such as insurance exchanges or cooperatives, would be likely to replace it. Obama already has proposed forming exchanges -- virtual marketplaces where private insurers would compete for consumers' business. And co-ops would allow consumers to band together to negotiate coverage.

Sebelius told CNN's "State of the Union" that a public option is "not the essential element" of healthcare overhaul, but that lowering insurance costs and preventing insurers from dumping customers for preexisting conditions or for exceeding coverage caps are must-haves.

"I think there will be a competitor to private insurers," she said. "That's really the essential part, is you don't turn over the whole new marketplace to private insurance companies and trust them to do the right thing."

Gibbs agreed, describing the "bottom line" for the president: "What we have to have is choice and competition in the insurance market."

Obama continues to believe that "the option of a government plan is the best way to provide choice and competition," Gibbs said on CBS’ “Face the Nation.”

But if there are other means to achieve that, Gibbs said, "the president will be satisfied." >>> Andrew Zajac | Monday, August 17, 2009