UPDATE: Some White House officials told Marc Ambinder that Sebelius misspoke, or the media misinterpreted her remarks. I would prefer a clear statement from the president.

Health and Human Services Secretary Kathleen Sebelius waved the white flag on Sunday:

Sebelius said the White House would be open to co-ops instead of a government-run public option, a sign Democrats want a compromise so they can declare a victory on the must-win showdown.

“I think there will be a competitor to private insurers,” she said. “That’s really the essential part, is you don’t turn over the whole new marketplace to private insurance companies and trust them to do the right thing. We need some choices, we need some competition.”

Sen. Richard Shelby, R-Ala., said co-ops might be a politically acceptable alternative as “a step away from the government takeover of the health care system” that the GOP has assailed.

(continues after the jump)

Sebelius also indicated that the White House is willing to scrap a worthwhile provision to placate lying liars on the right:

Even so, Sebelius said the [end-of-life counseling] proposal was likely to be dropped from the final bill.

“We wanted to make sure doctors were reimbursed for that very important consultation if family members chose to make it, and instead it’s been turned into this scare tactic and probably will be off the table,” she said. “And that’s not good news for the American public and not good news for family members.

The White House is barely even pretending anymore. As tarheel74 noticed while watching President Obama’s town-hall meeting in Montana, the president is now talking about health insurance reform rather than comprehensive health care reform.

While some optimists thought the president scheduled a town-hall in Montana in order to pressure Senate Finance Committe Chairman Max Baucus, it appears that Obama is not resisting anything Baucus wants to do with his “gang of six” negotiators. On the contrary, the White House has been telling drug and insurance lobbyists to work out a deal with Baucus’ committee. So with a 60/40 Senate, the White House is willing to give corporate interests, three conservative Democrats, two conservative Republicans and a moderate Republican total control over the health care reform bill.

Co-ops are a joke and won’t be able to lower costs or expand access in any meaningful way. Any health care reform bill that is acceptable to Senate Republicans and the insurance industry will certainly fail to solve our most important current problems.

I hope House Progressives don’t get rolled into voting for this kind of compromise (though if history is any guide, they will).