Update 3:25 p.m.: Nevermind. Via HuffPo and Greg Sargent, Sen. Conrad denies Rahm signaled to drop public plan.

Conrad says Emanuel was speaking in reference to the need to overhaul the health care system as a whole — to forge compromise and get a bill to the president’s desk. It was in no way a comment on the president’s willingness to do away with a public option.

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According to Bloomberg, picked up by Greg Sargent, White House Chief of Staff Emanuel apparently undercut efforts to include a robust public plan option in the reform package. Greg is referring to this now updated report from Bloomberg:

White House Chief of Staff Rahm Emanuel met last night at the U.S. Capitol with Senate Democrats and told them Obama is “open to alternatives” to a new government insurance program in order to get legislation overhauling the health-care system to his desk, said Senator Kent Conrad of North Dakota.

“His message was, it’s critical that you do this,” Conrad said.

Senate Finance Committee Chairman Max Baucus of Montana said Emanuel urged the senators to seek Republican support and didn’t discourage them from pursuing the use of non-profit cooperatives, an idea Conrad has proposed.

That updated link now says this:

Obama is signaling that he’s willing to compromise, and yesterday White House Chief of Staff Rahm Emanuel carried the message to lawmakers that the president is “open to alternatives,” Senator Kent Conrad of North Dakota said.

So, who’s talking here, and about what? The quotes are from Conrad and Baucus, both of whom have been pushing for (or tasked with finding) some bipartisan formulation for health reform. To keep their efforts alive, it’s necessary to signal that the White House is still open to Republican support.

But the report doesn’t claim Rahm said to abandon the public plan. It only claims that those who have been exploring alternatives to the plan to get Republican votes have Rahm’s blessing to keep trying. Whether more was signaled isn’t clear.

Moreover, it would not make sense for Obama to provide a strong defense of the public plan concept at a public press conference, and belittle the insurance industry’s objections while doing so, while sending Rahm to undercut support for the public plan with the Democrats who, when we’re done wasting time chasing non-existent Republican votes, will be the only votes for health care reform.

Here’s part of Senator Schumer’s floor speech in which he explains why a public plan is essential and sums up why the search for Republican votes is a waste of time:

To truly reform our health care system, Congress must pass legislation that includes a public option. And a watered-down public plan is no public plan at all.

It is important to remember how we arrived here. For a long time, when thinking hypothetically about health care reform, many in this country suggested we should move toward a single-payer system. The Republicans rejected that, and so at the onset of this debate, we met them halfway with a framework that continues to largely rely on private insurers.

So then we said, if we are going to continue to rely on mostly private insurance, can we at least introduce greater competition into the market by having a public plan as one option? The Republicans rejected that too.

We said, well, what if we ensured that the public plan had to adhere to all the same rules as private insurers, thus guaranteeing a level playing field? The Republicans still said no.

So, some Democrats came up with a new idea: what if we relied on a coop model that have served rural states well? In a good-faith attempt to consider this idea, I proposed some ideas for ensuring that co-ops could do the job of keeping private insurers honest. Yesterday, Senator Conrad indicated he could go along with many of these proposals. But Senator Conrad has never been the problem here; he has always been a good-faith negotiator with the very best interests at heart. It is the Republicans who have not been willing to negotiate. And so I am losing confidence that Senate Republicans will ever agree to the types of changes to a co-op to make it a viable alternative to a traditional public plan.

Let’s be clear. The President has been rallying his troops to support a public plan that people will want to choose, and that actually keeps the private insurers honest. If he’s also secretly sending Rahm to undercut the public plan with Democrats, the White House must know it can kiss their supporters and reform goodby. Aside from the WH’ annoying insistence on always reaching out to Republicans who are trying to make them and health reform fail, I’m not convinced that’s happening, but there are plenty of folks who want us to believe that it is.

And frankly, I’m much more concerned about those who haven’t fully explained what they mean by a "public plan," and so have little basis for claiming that alternatives like Conrad’s co-op concept would be just as good. It doesn’t help, for example, when Ezra Klein first said the "co-op" idea would be "okay," then later wrote that it’s not an acceptable substitute for a robust public plan, and recently suggested that with a few tweeks, this is just semantics.

As I’ve emphasized here, here, and here, folks need to be clear about what the public plan is, what it does and how its features are needed to meet the goals, before comparing it to supposed alternatives.

Other reactions to ambiguity:
krugman, Obama messes up on health care, big time

Sebelius (via AP) to Congress today:

Sebelius defended Obama’s call for a new public plan in the face of strong opposition from Republicans and fresh criticism from a powerful business group.

She told the House Energy and Commerce Committee that a government-run option would increase choice and competition, but the U.S. Chamber of Commerce said in testimony that it would "gut the private market."

"Whether or not this proposal is a Trojan horse for single-payer health care, it is apparent that its cause is ideological, not pragmatic," the Chamber said Wednesday.

Argued Sebelius: "If there is no choice in the market, cost regulation is almost irrelevant. It’s a marketplace strategy that competition is often more effective than heavy-handed regulation."