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If public option in healthcare is dead, what's next?

Obama administration officials have been talking up consumer-owned cooperatives. But they might not be big or strong enough to compete.

Jay Allen (right) protested outside a building in Dallas on Monday where two lawmakers were holding an event on healthcare reform.

Jessica Rinaldi/Reuters

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If the public option is dead, what might replace it?

In recent days, the White House pointedly has become less supportive of including in healthcare reform legislation the so-called "public option" – a government-run health plan intended to compete with private insurers.

As an alternative, Obama administration officials have been talking up consumer-owned cooperatives. They say that these nonprofit ventures – modeled after agricultural and electrical co-ops common in rural states – could help keep costs down and ensure that people in all parts of the United States have adequate insurance choices.

But some Democrats worry that co-ops would not be big or strong enough to slug it out with private industry. And setting up a national network of health co-ops might be extremely difficult and expensive, some say.

"It's hard to imagine how that takes on reality," says Thomas Miller, an American Enterprise Institute fellow who served as health policy economist for Congress's Joint Economic Committee.

On Monday, President Obama sought to reaffirm his support for the public option. He still believes that a public plan would be the best way to lower costs and ensure choice and competition in the health-insurance marketplace, said White House health-reform aide Linda Douglass in a statement.

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