Obama faces backlash over potential Retreat on Public Healthcare Option, Aug 15, Guardian, UK

US president's healthcare provision is now likely to be run by private insurance companies


Barack Obama faced a backlash from the left today after his administration signalled retreat over the introduction of a government-run national health plan.

Progressives dubbed the move 'treachery' and 'betrayal'.

Obama will continue to push for reform this year but the new healthcare provision is now likely to be run by private insurance companies rather than by the federal government, which had been his preferred option.

The apparent White House shift brought to the surface the divisions between Democrats over reform. Left-wingers expressed sadness and anger that Obama appeared to be backing away from the public option while party conservatives claimed that it had never been a realistic option anyway.

The softening of the White House position comes after weeks of sustained, noisy and disruptive protests across the country against his health plan, much of it orchestrated by the right.

Howard Dean, who chaired the Democratic party from 2005 to this year, today emerged as the most high-profile party member to voice concern about dropping the public option. Interviewed on TV network CBS, he said: "You can't really have reform without a public option. If you don't want to have the public option … just do a little insurance reform … and then we'll tackle health reform another time. But let's not pretend we're doing reform without a public option."

Dean's comments reflect the debate within the Democratic party between those who argue that Obama should not back down in the face of the Republican campaign and those who say that it is better to compromise - to get half of what they want rather than nothing.

Obama's healthcare plan, aimed at extending insurance coverage to 46 million Americans who at present have none, has produced one of the most divisive debates in the US since the Vietnam war. Obama, on a visit to Phoenix, Arizona, today was greeted by a crowd in the streets loudly expressing support or opposition to the healthcare plan, even though he was due to speak to military veterans about Iraq and Afghanistan.

The softening by the Obama administration over the public option was signalled by the US health secretary, Kathleen Sebelius, who yesterday said it was "not the essential element" of the healthcare plan.

The White House insisted that this did not amount to a change: Obama continued to think the public option was the best one but he had always been flexible about how to achieve his healthcare goals.

The group Healthcare for America Now, which has been paying for ads in support of the Obama plan, today expressed its continued support for the public option. Jacki Schechner, a spokeswoman, said: "We believe - and the president continues to say – that a public health insurance option is the best way to inject true competition and choice into the marketplace."

The group's blog reflected some of the liberal anger. One commenter, identifying herself as Mary, said the alternative appears to be public subsidies for insurance companies. "I feel literally sick over this betrayal," she said.

Healthcare for America Now has not given up the fight and today announced spending on more television ads targeting the states of members of Congress opposed to reform.

House Democrats today insisted they will not drop the public provision in their bill, at least not in the short term. The Senate, where most of the opposition is coming from, has not yet produced a bill. After both chambers pass bills, the two get together for horsetrading to produce a common bill.

Obama's administration is likely to be judged on whether he can get a health bill on the statute books - he sees it as the centrepiece of his first term. He is to continue the fight throughout the remainder of this month and into next. Although he is off on holiday with his family to Martha's Vineyard in New England next week, he is to break in to it to continue campaigning.

One of Obama's biggest problems is not the Republicans but conservatives in his own party, the so-called Blue Dog Democrats, opposed to the public option. One of them, Senator Kent Conrad from North Dakota, said on Fox News yesterday that the public option was never on the cards: "The fact of the matter is there are not the votes in the United States Senate for a public option. There never have been."

Instead, he proposed creation of cooperatives in which members could negotiate coverage with private insurance companies. But this leaves many liberals cold as they regard it as giving more money to insurance companies, detested for their high profits and patchy performance in paying out on claims.


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