Obama Stumps for Health-Care Reform
With President on the Road, Senators Explore Alternatives to Government-Run Plan

By Michael A. Fletcher and Shailagh Murray
Washington Post Staff Writers
Friday, June 12, 2009

GREEN BAY, Wis., June 11 -- As President Obama traveled to the heartland to sell a government-run insurance plan as essential to health-care reform, Senate negotiators began to explore a possible bipartisan compromise modeled after rural cooperatives.

Creating a "public option" to compete with private coverage has emerged as a significant hurdle as Congress begins to debate legislation to restructure the nation's health-care system, with the aim of delivering a bill to Obama by mid-October. Opponents include most Republicans and some moderate Democrats, who warn that the government would enjoy an unfair cost advantage and force private insurers out of business.

But many lawmakers who are skeptical of a federal plan expressed interest in an alternative proposal by Sen. Kent Conrad (D-N.D.), to create member-run health-care cooperatives. The co-op approach was discussed by Obama and Senate health-care negotiators at a White House meeting on Wednesday, participants said. And on Thursday, the idea dominated a closed-door meeting of the Senate Finance Committee, one of two panels involved in crafting the Senate bill.

Obama told supporters in a local gymnasium here that he would seek to create a health-insurance exchange to allow one-stop shopping. But the president added: "One of the options in the exchange should be a public insurance option -- because if the private insurance companies have to compete with a public option, it will keep them honest and help keep prices down."

The Conrad proposal is modeled after rural electricity, farming and telephone cooperatives that are owned and organized by members. The entities would negotiate rates with health-care providers and would have to meet the same licensing and regulatory requirements as private insurance companies, the senator said.

"I tried to come up with something that is not government-controlled, is a competitive delivery model, but nonprofit," Conrad said in an interview. "It would be on a level playing field with everybody else with, with a different ownership structure."

Sen. Charles E. Grassley (Iowa), the ranking Republican on the finance panel, said he likes the Conrad plan, and said Obama raised no objections when the issue surfaced at the Wednesday White House meeting. Sen. Mike Enzi (Wyo.), the ranking Republican on the Senate health committee, the other panel with jurisdiction over reform legislation, said he is seeking more details. He said the co-op approach could "increase the level of competition, if it were done right."

Sen. Charles E. Schumer (N.Y.), a member of the Democratic leadership and the Finance Committee, said he is helping to negotiate a deal that would be acceptable to Democrats who favor direct government intervention.

Schumer said he objected to setting up smaller organizations around the country, and instead favored at least one national co-op to compete against the big insurers.

"It has to have clout, it has to be large. . . . There would at least be one national model that could go all over the country," Schumer said. It also would require "a large infusion of federal dollars" at the outset, he said, declining to cite figures.

Sen. John D. Rockefeller IV (D-W.Va.) said he is dubious of Conrad's co-op model and is instead offering his own alternative that would pay providers Medicare rates for the first two years and then go to negotiated rates. It would be self-financed, through premiums, and be required to meet standard laws on contingency reserves.

"Private insurance companies want to have their cake and eat it, too," he said. "They want health-care reform to earn them maximum profits if they start covering millions of uninsured Americans, but they are not willing to abide by the fair rules, oversight and cost containment that Americans deserve."

The president's appearance here is part of the administration's effort to generate consensus for remaking the nation's health-care system, Obama's top domestic priority.

"Every day in this country, more and more Americans are forced to worry not simply about getting well, but whether they can afford to get well," Obama said. "Millions more wonder if they can afford the routine care necessary to stay well."

On Monday, Obama is scheduled to address the American Medical Association, the physician lobby that has expressed skepticism about elements of Obama's reform vision.

Obama has been adamant that change is needed to rein in health-care costs, which has been far outstripping wage increases in recent years. Obama called Green Bay -- which has better health outcomes and lower costs than many parts of the country -- evidence of the efficiencies that can be achieved through physician collaboration, preventive care and digital records.

"To those who criticize our efforts, I ask, 'What is the alternative?' What else do we say to all those families who now spend more on health care than housing or food?" Obama said. "What do we tell those businesses that are choosing between closing their doors and letting their workers go?"

Murray reported from Washington. Staff writers Ceci Connolly and Paul Kane in Washington contributed to this report.

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