It's no wonder many Americans are perplexed about a public option or confused by co-ops when even lawmakers struggle to explain them, reports CBS News correspondent Nancy Cordes.
"If it were a plan," said Sen. Arlen Specter, "it wouldn't be an option."
The public option, as proposed, would be run by the Department of Health and Human Services which also oversees Medicare.
With lower administrative costs, the government could offer lower insurance premiums than the private sector - giving uninsured Americans a more affordable option.
"One version of a public option would be like the way the Medicare program is run today where the government pays directly for health care. It sets regulated prices, it's take it or leave it for the doctors and it's big enough so the health care providers generally have to take it," said Mark McClellan, former director of the Centers for Medicare and Medicaid Services.
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But with Republicans universally opposed to a public plan, some centrist Democrats are seeking a middle ground proposing regional or state health insurance "co-operatives" instead.
The co-ops would be started with government seed money, but then turned over to the members themselves to manage.
Because the co-ops would be not-for-profit, any money left over from members' annual payments would be reinvested - theoretically bringing costs down for everyone.
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"The co-op is, in a sense, sort of halfway there," said Dr. Peter Kongstvedt of George Mason University. "It's part of the way there, it's not run by a private company, it's run by the community."
Hundreds of health care co-ops were established in the 1930s and 40s, but just a handful exist today - like the one run by Dr. David Ores for 800 New York City restaurant workers.
"Once they're out of the way, the for-profit private insurance companies like Oxford and Aetna - once they're not involved, the cost goes down by 80 percent," Dr. Ores said.
Proponents of the public option argue that the smaller co-ops could never compete with private insurance the way a government plan could.
Copyright 2009 CBS. All rights reserved.
Nancy Cordes is CBS News' congressional correspondent.