Private health insurers see their own claims denied

In an effort to maintain control of the healthcare debate, President Obama on Tuesday ridiculed critics of his government-run insurance proposal, saying private insurers have nothing to fear if they are efficient and consumer-friendly.

“If private insurers say that the marketplace provides the best-quality healthcare -- if they 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?” Obama asked. “That’s not logical.”

At the same time, the president left the door open to compromise with the private insurance industry as Congress begins the process of tackling one of the most complex and politically sensitive issues on the national agenda.

In a news conference Tuesday, Obama framed his proposal as the only way to break the cycle of ever-higher medical costs that has sapped the financial stability of families and the government.

At the same time, however, he refused to rule out the possibility that he might sign a healthcare bill that did not include a public-plan option.

“We are still early in this process,” he told reporters at the White House. “We have not drawn lines in the sand.”

The president, who last week both challenged and sought to appease doctors in a speech to the American Medical Assn., will host a healthcare town hall at the White House tonight, the second such event in the last two weeks.

And with help from the Democratic National Committee, Obama supporters plan to hold events around the country Saturday aimed at promoting his healthcare overhaul -- including blood drives, medical fairs and sessions on nutrition.

Fifteen years ago, the insurance industry was able to defeat President Clinton’s healthcare proposal by playing on the public’s fears with its “Harry and Louise” ad campaign, which featured a couple fretting about the government making their healthcare choices for them.

Now, Obama’s campaign website is urging people to share stories about their own battles with the healthcare system and to send letters to members of Congress.

“We think there are powerful stories to be told that argue for healthcare reform,” said Hari Sevugan, national press spokesman for the DNC. “Once you hear those stories, it demands reform this year.”

The administration’s push comes amid signs of division over Obama’s plan among some Democrats on Capitol Hill.

In recent days, the legislation being shaped by party leaders has drawn fire not only from Republicans and industry critics, but also from some moderate Democrats concerned about the cost of the overhaul and its potential to disrupt the current healthcare system. Obama’s plan is expected to cost at least $1 trillion over the next decade.

Several centrists, including Sen. Kent Conrad (D-N.D.), have indicated interest in pursuing alternatives to a government plan.

“You can have the greatest plan in the world on paper. If it does not pass, nothing changes,” said Conrad, who is working closely with senior Senate Democrats and Republicans on healthcare legislation and has championed the creation of health insurance cooperatives to compete with private insurers, rather than a government plan.

Illinois Sen. Richard J. Durbin, the No. 2 Democrat in the Senate, acknowledged Tuesday that preliminary work on the legislation would probably not be completed before Congress leaves town this week for its 10-day July 4 recess.

Senate Finance Committee Chairman Max Baucus of Montana, who is leading one of the two Democratic healthcare efforts in the Senate, sounded a sanguine note Tuesday. “I feel much more hopeful and encouraged,” he said. And Conrad noted that lawmakers were making progress in containing costs by reducing the size of the subsidy that the government would give people to help them buy insurance.

But neither would say when the negotiating might yield a bill.

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noam.levey@latimes.com

peter.nicholas@latimes.com