updated 6/4/2009 5:54:40 PM ET 2009-06-04T21:54:40

President Barack Obama's hopes for a bipartisan health deal took a hit Thursday as GOP senators protested a letter he wrote declaring support for a public insurance plan.

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Such a plan would compete with private insurers and is opposed by nearly all Republicans. Obama long has supported it, but he had avoided going into detail about his health goals, leaving the specifics to Congress and emphasizing hopes for a bipartisan bill.

That changed when Obama released a letter Wednesday to two Senate Democrats saying he believed strongly in the need for a new public plan.

"It wasn't helpful, it wasn't helpful," said Sen. Charles Grassley of Iowa, top Republican on the Senate Finance Committee, which is taking a lead role in crafting a health care overhaul. "Words make a difference. And this made a difference."

"Didn't help. It hurt" the chances for a bipartisan agreement, said Sen. Mike Enzi of Wyoming, top Republican on the Senate Health, Education, Labor and Pensions Committee.

"We were making great progress up until yesterday," Sen. Judd Gregg of New Hampshire, the top Republican on the Senate Budget Committee, told CNBC. "The president laid down a fairly significant partisan marker when he said the proposal has to have a public plan."

Government-run plan opposed
Added Sen. John Ensign, R-Nev.: "If he wants a bipartisan bill, he has to recognize that a government-run plan doesn't get you to a bipartisan plan." Ensign spoke in an interview following a Senate Finance Committee meeting on the legislation.

The White House spokeswoman for health policy, Linda Douglass, responded: "As the president said in his letter, he remains hopeful that many Republicans will see fit to join with Democrats to enact legislation that will lower health care costs for businesses, families and government."

Supporters of the public plan contend it would give people more choices, create more competition and "keep insurance companies honest," as Obama wrote Sens. Edward M. Kennedy, D-Mass., and Max Baucus, D-Mont. Kennedy heads the health committee; Baucus is chairman of the finance committee.

Opponents say private insurers could not compete with a public plan that didn't have to make a profit. They argue that private health plans would go out of business, leaving only an entirely government-run health care system.

The goal of overhauling the health care system is to lower costs and extend care to 50 million uninsured people. Obama wants a bill on his desk in October.

Kennedy commits to public plan
Kennedy has committed to having a public plan in his legislation. The more moderate Baucus also supports a public plan but he has tried to keep Republicans on board so his committee can produce a bipartisan product.

The private meeting that Baucus convened Thursday didn't appear to move him closer to that goal. A few Republicans emerged visibly frustrated. Baucus acknowledged that he was frustrated, too, while saying he was "searching to find that bipartisan solution."

Later in the day Baucus convened another meeting, this time of chairs and top Republicans of committees with jurisdiction over health care and budgeting. But though the senators present, including Enzi and Grassley, emerged to declare themselves united in support of a bipartisan solution, their disagreements were stark.

Baucus said that he expected the Senate to pass a bill with some version of a public option, while Grassley reiterated strong GOP opposition to that.

Congress might be able to pass a health overhaul bill with little, if any GOP support. But Obama, Baucus and others have said they want to avoid that outcome because such a measure would be less widely supported and less sustainable over time.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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