CHICAGO_The American Medical Association on Thursday endorsed a liberal health overhaul bill that includes a public insurance option, a bold step for a traditionally conservative group with a checkered past on health reforms.

In its strongest action yet signaling support for President Barack Obama's vow to reform health care, the nation's largest doctors' group sent letters to three House committees behind the bill. The letters, signed by AMA's executive vice president, Dr. Michael Maves, said the AMA appreciates and supports what is being called America's Affordable Health Choices Act.

The bill would create a health insurance exchange, or "marketplace for individuals and small employers to comparison shop among private and public insurers." It wouldn't force patients or doctors into plans _ a fear some physicians have had about the concept of public health insurance.

Another selling point is the bill's proposed Medicare reforms, including repeal of what AMA considers a flawed formula that has annually reduced Medicare reimbursements to physicians.

But the public option proposal is most controversial for the AMA; some member physicians at the group's annual meeting last month likened the notion to communism.

A personal appeal from Obama at the Chicago meeting won over some doctors and the group's policy-making delegates ended up adopting a measure signaling openness to reform that includes a public option. Obama said in a Thursday statement he was "grateful that the doctors of the AMA have chosen to support" the health insurance reform.


Dean Baker, co-director of the Center for Economic and Policy Research, a liberal think-tank, called the AMA's endorsement "a tremendous coup." He said it could create momentum for other groups to back Obama's health reform efforts and make opposing Republicans seem like obstructionists.

The bill's proposed public health option would create a new choice in places now dominated by one or two private insurers, according to a summary of the bill on the House Ways and Means Committee Web site. "It will be subject to the same market reforms and consumer protections as other private plans in the exchange and it will be self-sustaining _ financed only by its premiums," the summary says.

Dr. J. James Rohack, AMA's president, told The Associated Press that the group's endorsement shouldn't be seen as the AMA turning more liberal.

"It's not blue or red, or Democratic or Republican. This is something that is the AMA's core values," Rohack said. "The status quo that is 50 million Americans not having health insurance, a system that has administrative waste and as a result drives up premiums so that it is unaffordable for many patients _ that is just not acceptable."

The AMA has long believed any health system reform can be achieved by revamping private health insurance plans. It fought the creation of Medicare and succeeded in delaying its debut decades ago. That was when it had more clout; its membership has dwindled to include barely one-fourth of the nation's doctors.

Still, it remains a vigorous lobbyist, and Baker said its full-hearted backing of a proposal that includes a public option could be a turning point.

"I was certainly surprised," he said. "I didn't really expect them to be on board."

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On the Net:

AMA: http://www.ama-assn.org