Obama Aide Outlines Health Reform Strategy

ABC News' Teddy Davis reports:

The Obama White House thinks it can win congressional approval of a government insurance option, a major element of the president's health-care plan, by assuring lawmakers that it does not have to operate the same way as Medicare,  the government insurance program for Americans over 65.

"There are policy ways of getting around the objections people have," said Nancy Ann DeParle, the director of the White House Office of Health Care Reform.

"You don't have to use Medicare prices, you can use something else," she added.

DeParle, who ran Medicare in the Clinton administration, floated the possibility of using something other than Medicare reimbursement rates while participating in a roundtable with reporters sponsored by the Kaiser Family Foundation in Washington, DC.

DeParle conceded that a public plan will not be able to win over people who have a "philosophical" objection to government involvement in health insurance. She expressed optimism, however, that a public insurance option could be crafted in such a way that it overcomes the objections of those who worry about the cost shifting which comes when the government underpays health-care providers.

Creating a government insurance option that would operate alongside private insurers has emerged as a major flashpoint in the nascent health-care battle. Obama endorsed a public option during his presidential campaign and leading Democrats want to make sure that it survives.

"The thing that's worth going to the mat over is the public entity because that is what the bill lives or dies on," former Democratic National Committee Chairman Howard Dean told ABC News in an interview last month. "If the health insurance industry gets to write the bill, it will not be in there, and if that happens, we will not have done health reform." 

Because Medicare pays less than private insurance companies for some treatments in some places, conservatives worry that letting Americans enroll in a government insurance option would drive private insurers out of business and make it more difficult for Americans to find a doctor.

As recently reported by National Journal magazine, a Medical Group Management Association survey found that 24 percent of physicians' group practices already limit the number of Medicare patients they accept.

While some progressives want Obama to make a  government insurance option a non-negotiable element of health-care reform, DeParle reiterated the Obama view that the lack of a government insurance option would not automatically trigger a veto.

"I would never get into talking about vetoes," said DeParle. "I wouldn't do that."

After being peppered with a series of questions about the government insurance option, DeParle quipped: "You guys are really interested in the public plan, aren't you?"

UPDATE: The Insurance Industry Weighs In

An insurance industry spokesman, Rob Zirkelbach of America's Health Insurance Plans, reacted to DeParle's roundtable with reporters by saying that he appreciates that "there is a growing recognition of the significant impact that cost shifting has on consumers and employers."

He added, however, that Obama's openness to paying providers more than Medicare does currently will not protect providers and consumers in a budget crunch. He also expressed concerns about the market power that a government insurance provider would exercise.

"There's always a concern when someone can be both a player and the referee," said Zirkelbach. 

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