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Senators worry government health plan could hasten end of employer coverage — MedCity Morning Read, June 25, 2009

the latest struggle of Senate leaders trying to craft health care reform is whether subsidizing millions of people to join a proposed government-sponsored health plan would speed the erosion of insurance provided by employers — which the senators want to preserve. Under his proposed Health Insurance Exchange, the public option would be “one option among multiple options,” Obama counters.

WASHINGTON D.C. — So the latest struggle of Senate leaders trying to craft health care reform is whether subsidizing millions of people to join a proposed government-sponsored health plan would speed the erosion of insurance provided by employers — which the senators want to preserve — according to the New York Times.

Senator Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, told the Times that this concern dominated his committee’s discussion on Wednesday. The committee is among leaders in the nation’s health care reform effort.

On Wednesday evening, President Obama participated in a town hall-style meeting on health reform broadcast by ABC News from the White House. On the Nightline edition of the health care forum, host Charlie Gibson read part of a June 8 letter written by Republicans on the Senate Finance Committee to the president:

“At a time when major government programs like Medicare and Medicaid are already on a path to fiscal insolvency, creating a brand new government program will not only worsen our long-term financial outlook but also negatively impact American families who enjoy the private coverage of their choice. The end result would be a federal government takeover of our health care system, taking the decisions out of the hands of doctors and patients and placing them in the hands of Washington bureaucracy.”

They’re wrong,” Obama told Gibson. Under his proposed Health Insurance Exchange, the public option would be “one option among multiple options,” Obama said.

The concern, Gibson prompted, is that the public plan sponsored by the government would be at a competitive advantage to the plans of private insurers.

The president rebuffed the suggestion, saying “we can set up a public option where they’re collecting premiums just like an private insurer and doctors can collect rates.” But because the government plan would have lower administrative costs, “we can keep [private insurance companies] honest,” he told ABC News.

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