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The federal government would create a public health insurance provider under a health care reform plan agreed to Thursday by a group of key Senate Democrats, including Sen. Kay Hagan.

“We have crafted a plan that will stabilize health care costs and includes a Community Health Insurance Option, which I support,” the Greensboro Democrat wrote in an e-mail. “It is a backstop option for people without access to affordable coverage.”

Health care reform is the shorthand for a sweeping package of changes that backers say will help control the rising cost of medical services and ensure all U.S. residents have access to health care.

In the Senate, two committees have worked on that legislation: the Finance Committee and the Health, Education, Labor and Pensions Committee.

Hagan is a member of the health committee and attracted national attention because she expressed reservations about creating a public-option provider.

Having a public option was a key piece of the proposals favored by President Barack Obama and senior Democrats such as Sen. Ted Kennedy of Massachusetts.

Such a government-run health plan would insure those who aren’t covered by their employers, can’t afford to buy insurance on their own and don’t qualify for other government-run programs like Medicaid and Medicare.

Hagan worried openly about the potential cost and that the plan would disrupt the private insurance market by prompting employers to drop their private coverage.

Her concerns were seen as delaying the legislation on the closely divided health care committee, particularly because Kennedy has been too ill to attend many of its sessions.

But Hagan staff members said the plan floated Thursday addresses the senator’s concerns.

Gatekeepers will ensure that those with adequate private coverage will not enroll in the publicly run plans, they said. And businesses with more than 25 employees that don’t provide health insurance for their workers will pay a $750 fee per full-time employee toward the national program. Those two features will help make sure that private health insurance is the norm while creating an environment in which they say 97 percent of Americans would have health coverage.

“This public option is the kind of compromise plan that could get through the Senate,” said Stephanie Allen, Hagan’s communications director. That echoes another concern by Hagan that a public-option plan that cost too much would not be able to pass.

Those concerns earned Hagan scorn from some Democrats who see themselves as progressives or liberals. Using the Internet and other grass-roots tools, unions and other groups focused unfavorable publicity on Hagan.

“I suspect there were some progressives who felt some ownership over Hagan because they worked so hard to get her elected,” said Chris Kromm, executive director of the Institute for Southern Studies, a progressive think tank and publishing operation.

When Hagan became the Democratic nominee for Senate in 2008, Democrats of all political stripes — including liberals — unified behind her as a way to oust conservative Republican Elizabeth Dole.

Many of those liberals, Kromm said, might not have realized that Hagan had been a business-friendly Democrat in the state Senate and aspired to be a moderate when she reached Washington.

In addition, Kromm said, some constituents were confused by the variety of concerns that Hagan raised, perhaps mistaking caution about a public plan for opposition of any public option. And, he added, some of the public pressure may have helped Hagan make up her mind.

“This is a case where she started out in one place and was moved to another by the pressure,” Kromm said.

But a Hagan staff member who worked with her on the health care bill said that Hagan was interested all along in a bill that would allow people to keep their current insurance. “That was a pretty important goal of the senator,” the staffer said.

As described by that staffer, Allen and summaries of the plan circulated Thursday, people who needed health insurance would apply through a “gateway.” Once approved for coverage, they would have the choice of enrolling in the publicly run plan or another plan subsidized by the federal government.

After paying for initial start-up costs, the plan ideally would be funded mainly by premiums from participants as well as the fees paid by businesses without their own insurance. No provider would be forced to take the public option insurance, staffers said, and the rates paid by the plan would not be tied to Medicare or Medicaid.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com