Is Public Option 'Really' Off The Table?

There’s been a lot of speculation and chatter, but can Democrats really take a ‘public option’ off the table as they press ahead with health care reform?

Right now it seems traders are betting they can. In fact HMO stocks such as Aetna and UnitedHealth have traded higher in recent days on the belief that the White House was backing down from the public option.

No Public Option?

But that belief largely stems from a couple of statements made around the middle of the month that received a great deal of media attention – one of which came from the president.

“The public option, whether we have it or we don't have it, is not the entirety of healthcare reform. This is just one sliver of it. One aspect of it," he said.

The other comment came from Health and Human Services Secretary Kathleen Sebelius who said a government alternative to private health insurance is "not the essential element" of healthcare reform.

However, many prominent figures are saying quite the opposite.

House Speaker Nancy Pelosi declared around August 20th that a government-run insurance option was essential, and she knocked down speculation that the House health-care bill might be watered down before it is brought to a vote.

"I don't know how you would scale it down," Pelosi (D., Calif.) said at a news conference in San Francisco. "There's no way I can pass a bill in the House of Representatives without a public option." The bill has passed out of three House committees, in each case including a public option.

And now Howard Dean, a physician and former chairman of the Democratic National Committee (as well as former Governor of Vermont) is going around the country – mustering support for the public option.

“Americans need to have more choice,” he tells Fast Money. "Right now you lose your insurance if you lose your job. And if you get sick you can be prevented from getting it."

"Why not let Americans sign up for something like Medicare," he adds. "It follows you if you move. They charge you the same no matter if you’re sick of healthy."

"And if you like your current insurance you can keep that. It's all about more choice."

Republicans oppose that plan largely because they feel HMOs couldn't compete. They say, ultimately that would lead to less choice, not more.

All Or Nothing

As you might have also heard, one compromise being floated is something called the co-op plan. Although it’s not entirely clear how it might work the New York Times says “the government would offer start-up money, perhaps $6 billion, in loans and grants to help doctors, hospitals, businesses and other groups form nonprofit cooperative networks to provide health care and coverage.”

And where does all this dissent leave the health care agenda? Perhaps nowhere. Earlier this week U.S. Sen. Russ Feingold (D-WI) predicted there would likely be no health care bill before the end of the year - and perhaps not at all.

"Nobody is going to bring a bill before Christmas, and maybe not even then, if this ever happens," Feingold said. "The divisions are so deep. I never seen anything like that."

What do you think? We want to know!

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Trader disclosure: On Aug. 25th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Terranova Owns (AMZN), (MSFT); Terranova Owns (CCL) Puts; Terranova Is Short (SHLD), (EES); Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Cortes Owns (SPX), (GS); Cortes Is Short Nasdaq 100; Najarian Owns (BAC); Najarian Owns (BUCY) & Short (BUCY) Calls; Najarian Owns (C) Calls; Najarian Owns (FCX), Is Short (FCX) Calls, Owns (FCX) Puts; Najarian Owns (INTC) Calls; Najarian Owns (JPM) & Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (XHB) Call Spread