U.S. President Barack Obama stood by proposals to create a government-run health insurance program on Thursday while insisting the move was merely one element of a wider plan to reform the industry.

A debate over the so-called public option has overshadowed Obama's plan to expand health coverage to tens of millions of Americans while reducing costs and making the health insurance sector more competitive.

On Sunday Health and Human Services Secretary Kathleen Sebelius said the public option was not the essential element of the overhaul, sparking furor among supporters and forcing the White House to clarify its message about Obama's chief legislative priority.

She really didn't misspeak. The surprising thing is she'd been saying this all along, Obama told a radio program on Thursday, referring to Sebelius.

He said he believed the public option was important.

What we've said is we think that's a good idea, but we haven't said that that's the only aspect of health insurance, Obama said.

What she essentially said was...all these other insurance reforms are just as important as the public option.

Obama's healthcare plan have been hit from both sides, with liberal members of his own Democratic party pushing for major changes while Republicans and conservative Democrats fret about cost and government involvement.

Critics have seized on the public option idea, saying it would be too expensive in an age of soaring deficits and could amount to a government take-over of U.S. healthcare while driving private insurers out of business.

Democratic Party activists meanwhile have been upset by any sign the White House is dropping its support for the public plan, which Obama says could help keep private insurers in check and bring prices down.

TICKED OFF

I'm getting a little ticked off that it feels like the knees are buckling a little bit, said one caller on the radio program.

You have an overwhelming majority in both the House and the Senate, and you own the whole shooting match. And...it's very frustrating to watch you try and compromise with a lot of these people who aren't willing to, he said.

Obama, who has pinned considerable political capital on the reform drive, responded by saying: We are going to get healthcare reform done.

House of Representatives speaker Nancy Pelosi said the final bill would not survive in the House without a public option -- reflecting views of liberal Democrats who have mustered vocal support for the public plan idea.

There is no way I can pass a bill in the House of Representatives without a public option, she told reporters in California.

She said the president was not backing off the public option either. No he isn't. He isn't at all, she said.

Several version of healthcare reform bills are encountering difficulties in the Democratic-controlled Congress. The Wall Street Journal reported on Thursday that the White House and Senate Democratic leaders were mulling breaking healthcare legislation into two parts and passing the most expensive portions without Republican support.

I think we have to be very careful about splitting it off, Pelosi said, acknowledging, however, that procedural reasons could lead to such a move.

She said whether the legislation ended up as one or two bills, it would have to lower costs and improve care.

(Editing by Cynthia Osterman)

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