Health and Human Services Secretary Kathleen Sebelius emerged from a meeting with leading Senate Democrats on Thursday to reiterate President Barack Obama’s support for a government-run insurance option as part of health care reform.

Flanked by Sens. Tom Carper (D-Del.) and Chris Dodd (D-Conn.), Sebelius argued that the public plan option would fulfill the president’s goal of lowering costs and improving access by injecting competition into the health insurance market. Sebelius met with numerous Democratic Senators, including Majority Leader Harry Reid (Nev.), who earlier in the day said the Senate would not clear a health care package before the August recess.

Senators remain at odds over the bill’s components and how to pay for it, divisions that were made clear with Sebelius’ visit to the Hill.

Carper, a moderate and member of the Senate Finance Committee, voiced concern about the public insurance option, in particular. He said there are other options for lowering health care costs and increasing access to the uninsured, among them a proposal by Senate Budget Chairman Kent Conrad (D-N.D.) to create a nonprofit medical cooperative. Bipartisan negotiations on health care reform are ongoing in Finance, where a co-op plan is on the table.

“I think the president has made it clear, he thinks in a new health exchange — a new marketplace — that cost and competition are positive factors. Competition holds down costs; choice is good for consumers. The public option, I think, competing with private plans, can be any number of things,— Sebelius said. “Absent a public option, you really would have very heavy-handed regulation of people moving in on top of the private market.—

“So, I think the president has said all along and continues to believe that choice is good for consumers and competition is actually the best way to hold down costs, so the public option is a good idea in the new exchange,— Sebelius continued.

Although the news conference was about to break up, Carper said he wanted to make an additional comment, and countered that the public option — which would be akin to an insurance company created and run by the federal government — is unnecessary to accomplish Obama’s goals of cost-containment and improved access to care.

“Sometimes I think we get caught up in the notion of a public option and forget about what we’re really trying to accomplish,— Carper said. “What we want to do, whether it’s a public option, whether it’s a cooperative, whether it’s a fallback plan or trigger plan with a public option, we want to make sure that we’re going to hold the private sector honest. We want to make sure that competitive forces— are at work.

Absent the Democrats moving to pass health care reform via the budget reconciliation tool, the legislation in the Senate would require 60 votes.