Democrats Weigh the Calculus of Public Insurance

From The Washington Post:

As Congress breaks for its August recess, the debate back home will center on Democratic proposals to create a government-run insurance option, which insurers and Republicans are casting as a step toward socialized medicine.

President Obama supports the creation of a public insurance plan that would compete with insurers on "exchanges" -- state or regional marketplaces in which the uninsured and small businesses could buy coverage with the help of income-based subsidies. This competition ideally would keep insurers honest, as Obama says, and reduce the cost of universal coverage.

Most Republicans in Congress are dead set against a public option, saying it would drive insurers out of business. Some key centrist Democrats in Congress, notably Finance Committee Chairman Max Baucus (Mont.), say Democrats must give up on it if they want to win a filibuster-proof 60 votes in the Senate, and they are instead proposing insurance cooperatives, nonprofit groups owned by their members that are similar to rural utility co-ops. Obama recently expressed openness to this alternative.