It is more important that health-care legislation inject stiff competition among insurance plans than it is for Congress to create a pure government-run option, White House Chief of Staff Rahm Emanuel said Monday.

"The goal is to have a means and a mechanism to keep the private insurers honest," he said in an interview. "The goal is non-negotiable; the path is" negotiable.

His comments came as the Senate Finance Committee pushed for a bipartisan deal. To help pay for the package, the committee planned to announce an agreement Wednesday with hospitals and the White House for $155 billion over a decade in reductions to Medicare and charity-care payments for hospitals, according to a person familiar with the agreement. That will help pay for the legislation, expected to cost at least $1 trillion over 10 years.

One of the most contentious issues is whether to create a public health-insurance plan to compete with private companies.

Mr. Emanuel said one of several ways to meet President Barack Obama's goals is a mechanism under which a public plan is introduced only if the marketplace fails to provide sufficient competition on its own. He noted that congressional Republicans crafted a similar trigger mechanism when they created a prescription-drug benefit for Medicare in 2003. In that case, private competition has been judged sufficient and the public option has never gone into effect.

Mr. Obama has pushed hard for a vigorous public option. But he has also said he won't draw a "line in the sand" over this point.

Using the prescription drug plan as an example is brilliant. Pharma loved it. And they really loved Billy Tauzin, the man who rammed it through. Good times.

Dday wrote about the "trigger" in this post:

A trigger mechanism is simply absurd. The insurers have had decades to provide decent coverage and have demurred every time. They have shown themselves to be untrustworthy that entire time, including just last month, when they backpedaled on the cost controls they vowed to offer. Mike Lux, who has seen these battles up close, senses that this is the big proxy fight right now.

The insurance lobby has had multiple tactics for stopping the public option idea, which they despise because they know if regular folks have choice to go to a public option, insurance companies won't have the same ability to treat their customers like garbage when they get sick. The first tactic was just to try to kill the public option outright, and the good news is that they appear to have failed at that. This so-called trigger proposal is the second tactic: the idea is to write a "trigger" that will allow for a public option only under certain conditions, but write the legislation so that those conditions would never get met in the real world. It's a classic DC tactic, right up there with calling for a commission to study something. Olympia Snowe is carrying the insurance industry water on their trigger proposal, proposing triggers that would only get tripped in some fairyland none of us have ever visited.

The great thing for the insurance companies in a tactic like this is that it gives "centrist" Senators (centrist in Washington, DC usually means those who have taken massive amounts of campaign contributions from the affected industry) an excuse to help the insurance industry while looking like they are open to the public option that their constituents have been demanding.