A public plan that would compete with private insurers is opposed by nearly all Republicans. Obama long has supported it, but he had avoided going into detail about his health goals, leaving the specifics to Congress and emphasizing hopes for a bipartisan bill.
That changed when Obama released a letter Wednesday to two Senate Democrats saying he believed strongly in the need for a new public plan.
"It wasn't helpful, it wasn't helpful," said Sen. Charles Grassley of Iowa, top Republican on the Senate Finance Committee, which is taking a lead role in crafting a health care overhaul. "Words make a difference. And this made a difference."
"Didn't help. It hurt," said Sen. Mike Enzi of Wyoming, top Republican on the Senate Health, Education, Labor and Pensions Committee.
Added Sen. John Ensign, R-Nev.: "If he wants a bipartisan bill, he has to recognize that a government-run plan doesn't get you to a bipartisan plan." Ensign spoke in an interview following a Senate Finance Committee meeting on the legislation.
The White House spokeswoman for health policy, Linda Douglass, responded: "As the president said in his letter, he remains hopeful that many Republicans will see fit to join with Democrats to enact legislation that will lower health care costs for businesses, families and government."
Congress might be able to pass a health overhaul bill with little, if any, GOP support. But Obama and Democrats including Finance Committee Chairman Max Baucus have said repeatedly they want to avoid that outcome because such a measure would be less widely supported and less sustainable over time.
Supporters of a new public plan contend it would give people more choices, create more competition and "keep insurance companies honest," as Obama wrote to Baucus, D-Mont., and Sen. Edward M. Kennedy, D-Mass., chairman of the health committee.
Opponents say private insurers could not compete with a public plan that didn't have to make a profit. They argue that private health plans would end up going out of business, leaving only an entirely government-run health care system.
There appears to be little room for compromise, with Republicans contending that no matter how a public plan is designed, it would inevitably balloon and crush the private market.
"It's kind of a litmus test sort of thing," Grassley said. "It's just very, very difficult, but I suppose that somewhere out there there's something that's politically realistic that's not a public option that satisfies Republicans and Democrats. But it isn't a government-run system," Grassley said.
Many Democrats, meanwhile, insist that a final bill must contain a public plan. Even Baucus, a moderate who's been working intensely with Grassley to produce a bipartisan product, said Thursday he can't see the Senate passing a health care overhaul without one.
"I think a bill that passes the Senate will have some version of a public option," Baucus said after the second of two meetings he convened Thursday on health legislation.
Obama's goal for overhauling the health care system is to lower costs and extend care to 50 million uninsured people. The president wants a bill on his desk in October. Committees led by Kennedy and Baucus are both preparing to vote on bills later this month, though Republicans are protesting they're going too fast.