In an emailed statement to Bloomberg News, Health and Human Services Secretary Kathleen Sebelius said she’s open to the idea of dropping a public health insurance option in favor of a medical-insurance cooperative. “You could theoretically design a co-op plan that had the same attributes as a public plan,” Sebelius said.

The leading co-op proposal in the Senate, offered by Sen. Kent Conrad (D-ND), does not share the attributes of a public plan. Instead, Conrad’s proposal would create multiple state or regional non-profits as a competitor to the private insurance market. As Howard Dean has said of this plan: “The co-ops are too small to compete with the big, private insurance companies. They will kill the co-ops completely by undercutting them, using their financial clout to do it.”

Bloomberg’s Al Hunt asked Sebelius, “ you’re willing to compromise on your notion of a public plan…what’s non-negotiable?” Sebelius responded that the final bill has to “have a comprehensive approach that lowers costs. That’s non-negotiable.” She added reform also “needs to provide coverage for everyone.” Watch it.