Obama backs public and private healthcare insurance

The Obama administration’s senior healthcare official Wednesday flatly rejected the idea of taking over the nation’s medical insurance system, saying the federal government did not want to assume management of healthcare coverage.

Kathleen Sebelius, in her first appearance before Congress since being confirmed as the secretary of Health and Human Services, said the administration wanted a “public plan option” to encourage competition. It does not want to create a monopoly.

“Dismantling the private market and having an entirely public option, a single-payer system, I think is not something that the president supports,” Sebelius told the House Ways and Means Committee.

At the same time, Sebelius reaffirmed President Obama’s commitment to create a government-run insurance program to compete with private companies -- and to help cover the more than 46 million people in the U.S. without insurance and to encourage cost containment and better programs.

“Competition helps to promote innovation. It helps promote best practices and also can help to lower costs,” the former Kansas governor said.

Sebelius’ testimony came as the Obama administration worked to defuse the politically explosive debate over creating a public plan as part of a health system overhaul.

Many Republicans -- as well as insurers -- contend that a public plan would drive private insurance companies out of business, a claim repeated Wednesday.

“The rhetoric coming from the administration sounds good, sounds familiar: ‘If you like what you’ve got, you can keep it. We’re going to have more choice, more competition in healthcare,’ ” Rep. Paul D. Ryan (R-Wis.) told Sebelius. “But when you look at what is being advocated here, in particular a public plan option, it just seems . . . you’re embracing contradictory principles.”

Sebelius responded that states for years had offered their government employees a choice between a public insurance program and a private plan for healthcare coverage.

“It can work very effectively, and does work very effectively,” she said, indicating that such arrangements could be a model for overhauling insurance markets nationally.

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noam.levey@latimes.com