U.S. Reps. Neil Abercrombie and Mazie Hirono yesterday described a federal government-backed public insurance option in President Obama's health care reform plan as essential to creating competition with private insurers.

In a telephone meeting sponsored by AARP Hawai'i, the two Hawai'i Democrats said the public option would help cover the uninsured and give consumers a choice in a health care marketplace often dominated by large private insurance companies.

The public option is among the most contentious provisions in health care legislation before Congress, with opponents claiming a government-backed plan could eventually undermine private insurers. Lawmakers have also discussed nonprofit health cooperatives as an alternative to the public option.

"Unless we put forward genuine competition to the private-sector offerings, I don't believe that we're going to have anything in the way of sustainable health care let alone insurance reform take place," Abercrombie said. "And I think it would have a demoralizing effect."

Hirono called a public option a "very critical part of any health care reform.

"What's not happening in the health care system is any kind of competition or true choice, so I believe that a public option is one of the ways that we're going to inject competition, which should result in lower prices, but at the same time we need to make a lot of other kinds of systemic changes to how we provide health care."

Abercrombie and Hirono also backed an exemption in the reform plan for the state's Prepaid Health Care Act of 1974, which requires companies to provide health insurance to employees who work at least 20 hours a week.

Honolulu City Councilman Charles Djou, who is running in the Republican primary for Congress in urban Honolulu's 1st Congressional District, chided Abercrombie and Hirono for not holding "town hall" meetings on health care reform during the August recess. Djou held a town hall meeting on the issue last week.

"A U.S. representative should never fear meeting or talking directly with the people. I believe elected officials work for the public, not the other way around," Djou said in a statement. "That's why I am so disappointed to see Hawai'i's congressional representatives refusing to hold a public forum on health care — the hottest topic of debate in our nation right now. Hirono and Abercrombie's decision to only 'appear' via telephone, in a tightly controlled setting, sponsored by the AARP, is woefully inadequate."

Abercrombie and Hirono said reform opponents have spread misinformation intended to scare seniors. One caller from Kaua'i scolded the pair for suggesting opponents were "liars." Other callers were concerned about the impact of reform on Medicare, the federal health insurance program for the elderly.

AARP supports a provision that would gradually eliminate Medicare's so-called "doughnut hole," in which seniors who exceed annual prescription drug coverage limits but have not reached a catastrophic level have to pay the full costs of drugs. AARP Hawai'i said 36 percent of Hawai'i residents on Medicare fell into the gap in 2007.

The Congressional Budget Office estimates the reform plan would raise drug premiums for some seniors on Medicare by as much as 20 percent over the next decade. But the CBO also found that the plan would reduce seniors' average drug spending overall because higher premiums would be offset by lower cost sharing.