Obama, GOP's Snowe Working On Health Care Reform Compromise: Sources

President Obama and White House aides have been talking directly with Sen. Olympia Snowe about health care reform, R-Maine, who has proposed an alternative to the public plan.

Snowe's idea is to use the threat of a government plan to force private insurers to become more competitive and cost conscious. She has been advocating the approach for months in closed-door negotiations with fellow senators and in talks with White House aides and the president.

A source told CNN that White House officials are "deep in conversations" with Snowe on a much smaller health care bill than Obama originally envisioned.

The precise details have yet to be worked out, but the general idea is to give the insurance industry a fixed time to show that it can stem rising medical costs. If the private carriers fail, the government-run plan would be created under a "trigger." The approach could be tailored so that the government plan is used only in areas of the country where one or two private insurers control the market and have failed to bring down costs.

According to the Atlantic's Marc Ambinder, White House Chief of Staff Rahm Emanuel has been pushing the trigger idea internally, "and he and Snowe regularly trade legislative and political intelligence."

But the government plan wouldn't have to be used in regions where consumer have a choice of insurance companies and competition has kept prices low.

However, liberals are wary of Snowe's plan, favoring a robust government-run plan.

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Associated Press writers Ricardo Alonso-Zaldivar, Alan Fram and Ben Feller in Washington, Mike Glover in Iowa, and Mead Gruver in Wyoming contributed to this report.