WASHINGTON -- Officials say the White House and senior Senate Democrats at work on health care legislation are strongly considering a requirement for the federal government to compete directly with private industry in the sale of insurance.
Individual states would be permitted to drop out of the system, according to the officials, who spoke on condition of anonymity Thursday because the talks are at a sensitive stage.
Liberals in Congress long have viewed such an approach as essential to any health care overhaul. President Barack Obama has said frequently he favors it, but that it is not essential.
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Sens. Ben Nelson, D-Neb., and Kent Conrad, D-N.D., told reporters they had been told the private negotiations were considering the plan.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) _ The Obama administration declined to state a position Thursday on eliminating the health insurance industry's exemption from federal antitrust law, a legislative move quickly gaining strength in the Democratic-controlled Congress.
White House spokesman Robert Gibbs said the administration's National Economic Council "is undertaking a review of that legislation," and will make a recommendation to Obama at an unspecified time.
Gibbs spoke shortly after House Speaker Nancy Pelosi said the antitrust measure would be included in sweeping health care legislation expected on the floor of the House within a few weeks.
Officials also said a similar approach was under consideration in the Senate, where a companion health care bill is in the drafting stage in talks involving senior Democratic lawmakers and top White House officials.
Christine A. Varney, the head of the Justice Department's antitrust division, testified before Congress recently that the administration "generally supports the idea of repealing antitrust exemptions. However, we take no position as to how and when Congress should address this issue."
Varney also said, "Concerns over the exemption's effects are especially relevant given the importance of health insurance reform to our nation. There is a general consensus that health insurance reform should be built on a strong commitment to competition in all health care markets, including those for health and medical malpractice insurance." Repeal of current exemptions covering the industry would "allow competition to have a greater role in reforming health and medical malpractice insurance markets than would otherwise be the case."
The drive to crack down on the insurance industry comes several days after its major trade group, America's Health Insurance Plans, issued a report highly critical of health care legislation, and warning it would lead to a swift jump in insurance premiums for millions with insurance.
In general, supporters of the legislation say it would lead to greater competition in the insurance industry by banning price fixing, market allocation and other anticompetitive practices.
The industry counters that it is heavily regulated, and lawmakers are in search of a solution for a problem that doesn't exist.
Despite rising hostility, the industry's chief lobbyist, Karen Ignagni, said during Thursday that insurers "can continue to make a major contribution" to the overhaul effort. "Yes, we can achieve reform," she said at an industry conference several blocks from the Capitol.
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