By dropping his insistence on a public insurance option, President Obama angered some of his most loyal supporters but sharply improved the odds of passing a far-reaching healthcare overhaul.

Moderate Democratic lawmakers are now more likely to back other parts of the evolving legislation, such as prohibiting insurers from denying coverage because of preexisting conditions or cutting off benefits to ill policy-holders, as well as making it easier for small businesses to cover workers.

At the same time, the White House appeared to be making a calculation that liberals would go along with the legislation even if it lacked a provision they deemed indispensable.

The White House expressed Obama’s position in calibrated language, making clear that though he preferred to include a government-run healthcare plan in legislation, its absence would not be a deal-breaker.


Speaking to reporters on Air Force One, Press Secretary Robert Gibbs said there had been no change in White House policy with respect to a government-run plan. Obama wants an insurance market that does a better job of serving consumers, he said, and doesn’t consider a public option the only means of accomplishing that.

“The goals are choice and competition,” Gibbs said. “His preference is a public option. If there are other ideas, he’s happy to look at them. I think this is true not only for the issue of healthcare, but for virtually every other issue that he’ll ever deal with in public life.”

Many congressional analysts expect the House to approve some form of public plan and the Senate to reject it, setting up a showdown in the final round of negotiations -- probably late this fall.

But the political gain for Obama was clear Monday in the reaction of Rep. Rick Boucher of Virginia, one of five Democrats who opposed the bill when it cleared the House Energy and Commerce Committee in July.


Boucher said Obama’s willingness to compromise on the public option had strengthened the president’s hand among conservative Democrats and other skeptics without harming the basic goal of lowering healthcare costs and insuring more people.

Dropping that option, Boucher said, “creates the opportunity to pass the healthcare bill. . . . A government-operated healthcare plan is not essential” to reform.

Throughout the healthcare debate, there has been a push for a more competitive insurance marketplace -- either through the creation of cooperatives or a government plan -- that would drive prices down.

Polls have shown that a large majority of Americans favor a public option. But a vocal group of opponents, who fear an expanded federal influence in people’s healthcare, have taken their case to town halls around the country during the August congressional recess. They have argued that a government-run plan would have an unfair advantage and ultimately drive private insurers out of business.


The opposition reached such a pitch, dominating news reports, that the president held three town halls of his own in recent days to rebut what he has called misinformation about his healthcare plan.

And in making clear that the public option was merely a “means to an end” -- in the words of a senior Obama official who requested anonymity when discussing administration thinking -- the president may be able to blunt some of the criticism.

Centrist Democrats on Monday said they welcomed the new White House flexibility.

Rep. Jason Altmire (D-Pa.), a second-term lawmaker from a swing district, said: “It’s going to bring votes.” Altmire, who was one of three Democrats to vote against the bill in the House Education and Labor Committee, said that the government plan had “become a flash point.”


Families USA Executive Director Ron Pollack, a leading consumer advocate who has been pushing a healthcare overhaul for decades, said his group had been distributing a memo touting the “10 Reasons to Support the Health Care Reform Bills.” A government plan was only one of them.

“The health reform bills have many critical factors designed to make healthcare more accessible and more affordable,” Pollack said in an interview. He and others noted that the bills working their way through the House and Senate included provisions that would transform the way Americans get health insurance -- even without a government plan.

“The public plan is not the essential element of reform,” said Jim Kessler, vice president for policy at Third Way, a centrist Democratic think tank in Washington.

When it comes to strategy, many lawmakers long have seen a concession on the government-run plan as essential to getting any healthcare bill through the Senate, where 60 votes are needed to ensure passage.


All 40 Senate Republicans oppose the public option, as do some Democrats. Majority Leader Harry Reid (D-Nev.) has been working to overcome political obstacles in the Senate, where a small bipartisan group of lawmakers has been trying to reach a compromise.

“While Sen. Reid supports a public option, he also supports bipartisan compromise healthcare reform that cuts cost and provides coverage for all Americans,” said Reid spokesman Jim Manley. “There are different proposals on the table that can accomplish that goal.”

Obama’s willingness to jettison the public option if necessary risks alienating some in his liberal base.

Jed Lewison, a liberal blogger, said that if a healthcare bill passed without a government-run program, grass-roots support for future Obama objectives may be more tepid.


“People’s intensity will definitely diminish,” Lewison said. “People have been listening to strong arguments for the public option coming from the administration. And they believe those arguments. If it comes down to where people feel like in the last few yards of the field, the rug was pulled out from underneath them, they may not be as willing to work hard the next time around.”

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peter.nicholas@latimes.com

janet.hook@latimes.com


Noam N. Levey in the Washington bureau contributed to this report.

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BEGIN TEXT OF INFOBOX

Other Obama compromises


President Obama’s willingness to compromise on the public option is not the first time he has modified his position as the healthcare battle has unfolded. Here are some other areas of change:

NEGOTIATING LOWER DRUG PRICES

Then: As a candidate, Obama ran an ad vowing to repeal a 2003 law that barred the government from using its clout to negotiate lower prescription prices with drug companies.

Now: Democrats -- in a deal “blessed” by the White House, according to pharmaceutical lobbyist Billy Tauzin -- last week got the drug industry to back the healthcare overhaul by agreeing that the ban on negotiating drug prices would remain in force.


UNIVERSAL INSURANCE COVERAGE

Then: Obama, throughout the presidential campaign, embraced an overhaul that would mean coverage for all Americans.

Now: Last week, he said about 38 million of the 46 million people now uninsured would get coverage.

IMPORTING PRESCRIPTION DRUGS


Then: “Barack Obama and Joe Biden will allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the U.S.,” their campaign website said.

Now: Worried drug executives have been told “health insurance reform that lowers costs, including pharmaceutical costs, would probably make such legislation unnecessary,” according to White House spokeswoman Linda Douglass.

Source: Los Angeles Times