Analysis: Obama rebukes insurance critics, GOP

WASHINGTON — Even for a Democratic president, Barack Obama’s challenge to health insurance companies and free market principles Tuesday were unusually pointed.

A government-run health insurance option is needed “to discipline insurance companies,” he said, part of his rallying cry for comprehensive health care overhaul. If they can’t compete, it’s probably their fault. Many private insurers, he said, spend too much time thinking about profits instead of helping people.

The barbs were aimed at the Republican lawmakers and insurance industry groups that have criticized his plan while wrapping themselves in free enterprise’s cloak. But the president, whose liberal supporters sometimes question his fervor for their causes, stopped short of fully committing to a public insurance option.

“We have not drawn lines in the sand,” Obama said at a White House news conference. His call for a public insurance option, in other words, might become a bargaining chip as Congress grapples with sweeping proposals to revamp the nation’s health care system.

Obama’s top legislative priority is to provide coverage to nearly 50 million uninsured Americans and cut costs. He wants to sign a bill in October.

While his tone and demeanor were as calm as ever, the president responded sternly to the health insurance industry, which had sent him a warning only hours earlier. The industry’s two largest trade groups said his proposed government insurance plan would have unfair advantages and would likely dismantle the employer-supplied coverage that millions of Americans have relied on for a half-century.

Obama disagreed, sharply.

“The public plan, I think, is an important tool to discipline insurance companies,” he said. “Too often, insurance companies have been spending more time thinking about how to take premiums and then avoid providing people coverage than they have been thinking about ‘How can we make sure that insurance is there, health care is there, when families need it?’”

A public plan would not be unfairly subsidized, Obama said. It would have to collect premiums and provide good service like any viable operation. Public and private providers alike would have to stop the practice of refusing to insure people with pre-existing medical problems, he said.

With those caveats, he said, private insurers “should be able to compete.” If the government-run program “is able to reduce administrative costs significantly, then you know what, I’d like the insurance companies to take note and say, ‘Hey, if the public plan can do that, why can’t we?’”

He practically taunted those who denigrate government bureaucrats and exalt the free market.

“Why would it drive private insurance out of business?” he said of the proposed public option. If private insurers “tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.”

Obama acknowledged that some employers might stop offering their workers insurance if a low-cost public option is available. But U.S. employers will continue to stop offering insurance for other reasons — mainly, high costs — if the health care system is not overhauled, he said, and a government-run plan should be part of the change.

He went so far as to suggest that Americans don’t know their own minds when they praise their insurance providers. Some polls show that up to 80 percent of people “are satisfied with the health insurance that they currently have,” Obama said. “The only problem is that premiums have been doubling every nine years, going up three times faster than wages.”

His critics quickly fired back. The Republican National Committee released a cable-TV ad saying Obama’s insurance plan would result in “putting government bureaucrats in charge instead of patients and their doctors.”

These critics may take some comfort in the ample wriggle room the president left himself.

“Right now,” Obama said at the news conference, “I will say that our position is that a public plan makes sense.”

EDITOR’S NOTE: Charles Babington covers the White House for The Associated Press.