WASHINGTON (

TheStreet

) -- After sending a series of signals this past weekend that he was willing to embrace insurance cooperatives over a government-run plan, President Barack Obama attempted to appease allies who expressed outrage over the apparent shift.

The White House insisted there had been no change in position, adding that the president still favors a federal option for the sale of health insurance. "The bottom line is this: Nothing has changed," said a memo containing suggested answers for administration allies to use if asked about the issue.

But some supporters of health care overhaul sounded less than reassured.

"You really can't do health reform" without allowing the government to compete with private insurers, said Howard Dean, a former Democratic Party chairman. "Let's not say we're doing health reform without a public option," he added in a slap at the administration's latest move.

His remarks were echoed by lawmakers as well as AFL-CIO President John Sweeney, who said the option was the only way to force "real competition" on the insurance industry.

Obama and his top aides had appeared to signal a coordinated retreat over the weekend on the necessity of a provision under which consumers could choose from health insurance policies sold by the federal government as well as those marketed by private companies. "All I'm saying is, though, that the public option, whether we have it or we don't have it, is not the entirety of health care reform," the president told a town hall-style audience in Grand Junction, Colo., on Saturday. "This is just one sliver of it, one aspect of it."

The government option has emerged as one of the most contentious elements of legislation taking shape in Congress, with critics saying it is a step toward a federal takeover of health care and supporters arguing it is essential to create competition with private firms.

Proposals for creation of nonprofit cooperative ventures have emerged as an alternative, but so far, neither liberals nor conservatives have shown great interest.

One constituency that was likely not outraged by Obama's weekend comments? Healthcare providers and insurance companies.

Indeed, on a day in which the markets plunged across the globe, the health care sector experienced the smallest declines of the day, with several major health care stocks finishing the day in the green.

Tenet Healthcare

(THC) - Get Report

ended Monday's trading session up 1.7% at $4.85, as did

Universal Health Services

(UHS) - Get Report

, which rose 1.7% to $59.98,

Health Management Associates

(HMA)

, which climbed 1.8% to $6.64, and

LifePoint Hospitals

(LPNT)

, which gained 1.1% to reach $25.91.

Insurance companies, meanwhile, fared even better.

Aetna

(AET)

,

United Health

(UN) - Get Report

,

Healthnet

(HNT)

,

Humana

(HUM) - Get Report

,

Wellpoint

(WLP)

and

CIGNA

(CI) - Get Report

were all higher on the day, by 4.8%, 1.5%, 3.3%, 2.4%, 2.9% and 3.0%, respectively.

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