March 26 (Bloomberg) -- House Speaker Nancy Pelosi said the House this year will consider health-care legislation including an option for a government-run program that would compete with insurers.

“This is a big agenda, and I believe it should have a public option in it for it to be really substantial,” Pelosi told reporters at her weekly news conference in the U.S. Capitol.

President Barack Obama has said he wants Congress to produce legislation that would expand health-care coverage for the country’s 46 million uninsured and reduce medical costs. Republicans and some insurers have opposed the creation of a new program modeled on Medicare as part of the effort. The top Republican on the Senate Finance Committee, Senator Charles Grassley of Iowa, last week called the idea a “deal-breaker.”

Pelosi said the Democratic-controlled House will be “aggressive” in its approach to a health-care overhaul, which is a centerpiece of Obama’s agenda. She said a government role in health care will help U.S. companies be more competitive.

“This is not only about the health of individuals in our country, which will be justification enough,” said Pelosi, a California Democrat. “It’s about the competitiveness of our businesses to make them globally competitive because they are competing with companies and countries where the federal government -- their governments -- pay for health care. They don’t have to bear those health care costs.”

Aetna’s View

Ronald Williams, chief executive officer of Hartford, Connecticut-based Aetna Inc., told a Senate panel this week that insurers would be at a competitive disadvantage under a plan that would, in effect, extend Medicare, the U.S. government health plan for the elderly and disabled, to more people. Williams said the industry pays an extra $89 billion a year to providers to make up for “underpayments” from patients covered by existing government programs.

Obama’s budget proposal would create a $634 billion fund over 10 years to expand health insurance coverage. The president didn’t offer a specific plan, saying he was open to “all serious ideas,” including taxing employer-provided health care, something he opposed during the campaign. He has said he recognizes concerns that a government-run plan may have unfair cost advantages over private plans.

Pelosi defended a drive by House Democrats to put health- care legislation on a fast track under a budget proposal announced this week.

Legislative Maneuvers

A draft of the House tax-and-spending blueprint calls for using “reconciliation” procedures, a maneuver that would allow a health-care overhaul to move through the Senate with a requirement for a simple majority of 51 votes. Under normal Senate debate rules, 60 votes are needed to keep opponents from blocking legislation.

Senate Democrats didn’t include such fast-track language in their version of the budget resolution. Some Senate Democrats join Republicans in rejecting the reconciliation tactic.

Senate Majority Leader Harry Reid of Nevada said today that he hasn’t ruled out adding the fast-track language to the budget blueprint in negotiations with the House on a final plan.

“We’re taking nothing off the table,” Reid told reporters.

Lawmakers will likely work out their differences next month when they complete budget plans for the fiscal year beginning Oct. 1. White House Budget Director Peter Orszag declined yesterday to say whether the administration supports using the tactic.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

Last Updated: March 26, 2009 14:31 EDT