Forty-one percent (41%) of American adults believe it would be a good idea to set up a government health insurance company to compete with private health insurance companies. A new Rasmussen Reports national telephone survey finds that an identical number (41%) disagree.

President Obama is now aggressively campaigning to build support for creating such public-sector competition. Later today, he is expected to give a major address to the American Medical Association that outlines his health care reform goals including the creation of a government-run health insurance company.

Just 32% of Americans believe that the addition of a public sector insurance option would reduce the cost of health care. Forty percent (40%) say it would not.

Sixty-three percent (63%) say it’s likely that a government insurance company would lose money and require taxpayer subsidies. Just 20% say that’s not likely.

Forty-nine percent (49%) of Americans believe private insurance companies will provide better service and more choice than the government option. Thirty-four percent (34%) hold the opposite view.

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Support for creating a government health insurance company has changed little since April. Rasmussen Reports will track support for this proposal as the public debate continues.

The inclusion of a new public sector insurance option has emerged as a key sticking point in the congressional debate over health care reform. Virtually all congressional Republicans oppose the idea, and their concerns are shared by a number of moderate Democrats. House Speaker Nancy Pelosi and other liberal Democrats have said that a public option is essential.

Among the general public, 61% of Democrats favor the idea while 67% of Republicans are opposed. Those not affiliated with either major party are evenly divided.

Half (50%) of the nation’s Democrats believe the public-sector competition will reduce the cost of health care. Most Republicans and a solid plurality of unaffiliateds disagree.

A review of recent polling on health care reform shows mixed reviews for the consensus plan emerging in Congress.

The underlying political challenge is that just 35% of Americans rate the U.S. health care system as good or excellent. That offers plenty of room for improvement. However, among those with insurance coverage, 70% rate their own coverage as good or excellent. This generates strong opposition towards any proposal that would force them to change their current coverage.

In practical terms, the other big challenge is paying for reform. Only 19% of Americans believe health care reform will lead to lower costs while 45% think it will raise costs even more. Current estimates are that the reform plan emerging from Congress will cost more than a trillion dollars over the next decade.

Voters remain closely divided on the urgency for health care reform, given the troubled state of the economy. Forty-six percent (46%) believe the Obama administration should move ahead with health care reform, while 45% say it should wait until the economy improves. Support for health care reform has slipped slightly as more voters think the president should work harder on his promise to cut the federal deficit in half in the next four years.

Just 32% of Americans say they are willing to pay higher taxes for health care reform. One specific idea currently being floated by some in Congress attracts an even more negative response. Americans hate the idea of taxing health insurance benefits and oppose it by a 77% to 11% margin.

While 65% of Americans support the concept of providing health care coverage for all, the details are more problematic. For example, some young and healthy adults are uninsured because they choose not to buy insurance. Most voters oppose making health insurance mandatory for all Americans. Also, there is strong opposition to any plan that would provide government health insurance coverage to illegal immigrants.

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