FACTBOX: Lawmakers weigh options on public health plan

(Reuters) - Congressional Democrats working on an overhaul of the U.S. healthcare system are discussing several different possibilities for a government-run insurance plan to compete against private insurers.

President Barack Obama has argued that a government-run plan -- the so-called public option -- is needed to ensure price competition in the insurance market. Republicans, health insurance companies and some Democrats oppose a government plan.

Here are some of the proposals for a public option being debated among lawmakers:

* A "robust" public option favored by House of Representatives Speaker Nancy Pelosi and many liberal Democrats. That would set up a government health plan along the lines of the Medicare program for the elderly. It would compete with private insurance companies in the individual and small business insurance markets. Payments to doctors and other health providers would be based on Medicare payments plus 5 percent.

* A public option that would compete with private insurers on a more level playing field. This type of plan was included in healthcare reform bills passed by the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee. The government plan would have to negotiate payment rates with hospitals, doctors and other providers.

* A public plan that would start by negotiating rates with health providers but if medical coverage premiums rise too rapidly, the more robust plan would be triggered and reimbursement rates would be based on Medicare payments plus 5 percent.

* Senate Democrats are also considering proposals that would allow individual states to "opt in" or "opt out" of a new government plan. This has attracted some support from centrist Democrats. Senate negotiators are said to be leaning more toward a proposal that would put in place a national plan that will allow states to opt out.

* Senate leaders are also considering a proposal included in the bill passed by the Senate Finance Committee that would provide government grants and loans to groups looking to set up nonprofit health cooperatives. This has attracted some support from centrist Democrats, but liberals believe the cooperatives would not provide enough competition.

* If no version of the public option is able to garner the 60 votes needed to overcome procedural hurdles in the 100-member Senate, lawmakers could turn to a "trigger" proposal by Republican Senator Olympia Snowe. That proposal would trigger a new public plan if market reforms fail to expand affordable medical coverage to U.S. residents.

(Reporting by Donna Smith in Washington; editing by David Alexander and Mohammad Zargham)