House Democratic leaders have reached a deal with a group of conservative Democrats that critics say would weaken a public insurance option in healthcare reform. The agreement with the Blue Dog Coalition preserves the public option, but without requirements linking payment rates to Medicare. Without rules capping payments to hospitals and doctors, the government-run public option would have higher costs. Speaking in North Carolina, President Obama said his healthcare reform plan would stop insurance companies from denying coverage to patients with preexisting health problems or who become gravely ill.

President Obama: “What we need and what we will have when we pass these reforms are health insurance consumer protections to make sure that those who have insurance are treated fairly and insurance companies are held accountable.”

Congressional leaders hope to hold a vote on healthcare legislation in September.