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Public Option Up in the Air After Comments

White House officials gave conflicting statements Sunday about whether the final draft of a health care reform bill would include a public option.

In an appearance on "Face the Nation," White House Press Secretary Robert Gibbs indicated that President Obama still favors a public option, saying it would drive down costs and provide more options, particularly for people who currently have limited options.

But also on Sunday, Health Secretary Kathleen Sebelius said a government alternative to private health insurance is "not the essential element" of the administration's health care overhaul.

Sebelius' comments indicated the White House could jettison the contentious public option and settle on insurance cooperatives as an acceptable alternative, a move embraced by some Republicans lawmakers who have strongly opposed the administration's approach so far.

Officials from both political parties reached across the aisle in an effort to find compromises on proposals they left behind when they returned to their districts for an August recess. Mr. Obama has been pressing for the government to run a health insurance organization to help cover the nation's almost 50 million uninsured.

Sebelius said the White House would be open to co-ops instead of a government-run public option, a sign Democrats want a compromise so they can declare a victory on the must-win showdown.

"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. We need some choices, we need some competition."

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Ralph Neas, CEO of the National Coalition on Health Care, a non-partisan alliance of groups working for health care reform, talked with CBS News Correspondent Martha Teichner about why angry opponents of the Democrats' reform efforts keep bringing up the public option at town-hall meetings across the country on CBS's "Sunday Morning."

"The reason they oppose the public option is they think it's a stalking horse. They think the real plan of President Obama, or those who want health care reform, is to have single-payer, totally government-run health care reform," Neas said. "It will fail if people think it is tilted to kill the private insurance industry."

Political professor Larry Sabato, who directs the University of Virginia's Center for Politics, told CBS News Correspondent Sharyl Attkisson that GOP voters, still dissatisfied with Mr. Obama's election last November, are using the health care debate to vent their frustrations about the president.

"It's about a whole range of issues that started to develop last November after Barack Obama's election," Sabato said. "Then as Obama started making appointments, getting a stimulus bill passed, proposing a health care initiative, all of this further irritated the 46 percent who voted against him … You can almost see that the anger and frustration have built up month after month, and it's exploded, and the proximate cause of the explosion is health care."

Sen. Richard Shelby, R-Ala., said co-ops might be a politically acceptable alternative as "a step away from the government takeover of the health care system" that the GOP has assailed.

Sen. Kent Conrad, D-N.D., chairman of the Senate's budget committee, pushed the co-op model as an alternative, saying it has worked in other business models.

As proposed by Conrad, the co-ops would receive federal startup money, but then would operate independently of the government. They would have to maintain the same financial reserves that private companies are required to keep to handle unexpectedly high claims.

Republicans say a public option would have unfair advantages that would drive private insurers out of business. Critics say co-ops would not be genuine public options for health insurance.

Meanwhile, Sen. Orrin Hatch, R-Utah, said he would return to the bargaining sessions to find a bipartisan solution to a health care problem that has long vexed Washington.

"I'm always ready to go back to the bargaining table," Hatch said. "Heck, I've probably helped pass more bipartisan health care legislation than anybody I know."

That legislation, however, seemed likely to strike end-of-life counseling sessions. Former Alaskan Gov. Sarah Palin has called the session "death panels," a label that has drawn rebuke from her fellow Republicans as well as Democrats.

Even so, Sebelius said the proposal was likely to be dropped from the final bill.

"We wanted to make sure doctors were reimbursed for that very important consultation if family members chose to make it, and instead it's been turned into this scare tactic and probably will be off the table," she said. "And that's not good news for the American public and not good news for family members."

Sebelius spoke on CNN's "State of the Union" and ABC's "This Week." Shelby and Conrad appeared on "Fox News Sunday." Hatch was interviewed on "This Week."

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