Health and Human Services Secretary Kathleen Sebelius told CNN's John King that insurance co-ops could work in place of a government insurance option. Sebelius said that there should be "choice and competition" but a public option was not "essential."

"I think what's important is choice and competition and I'm convinced at the end of the day, the plan will have both of those. But [a public option] is not the essential element," said Sebelius.