The public option was always a compromise for serious supporters of health-care reform, who — like Barack Obama when he was running for the Senate in 2003 — knew that a single-payer “Medicare for All” system was what America needed to provide health care to everyone while controlling costs.

But, in the reform legislation debuted Thursday by House Speaker Nancy Pelosi, the compromise was even more compromised than had been expected.

Pelosi says the legislation is “historic,” and celebrates the fact that is does still include a public option — a component many pundits had said was destined for abandonment.

But, while there is a public option, it is anything but robust.

Progressives believe Pelosi has bent to far to the right.

And The New York Times suggests as much in its analysis, which declares that:

Under pressure from moderate-to-conservative members of the House Democratic caucus, Speaker Nancy Pelosi has decided to propose a government-run insurance plan that would negotiate rates with doctors and hospitals, rather than using prices set by the government…

Ms. Pelosi said the public plan, which she prefers to call a “consumer option,” would compete with private insurers. But the speaker was apparently unable to muster the votes needed for the ‘robust’ liberal version of a public plan, which she has repeatedly said would save more money for consumers and the government.

Translation: The “public option” Pelosi and her team have proposed a plan that would not make payments for care based on Medicare rates, as the Congressional Progressive Caucus and key Senate Democrats have proposed.

Rather, under the Pelosi plan, the rates be tied to those of the big insurance companies. That’s a big, big victory for the insurance industry, as it will undermine the ability of the public option to compete — and to create pressure for reduced costs.

Pelosi’s plan also drops a number of provisions that had been advanced at the committee level to promote consideration of “Medicare for All” models and to allow states to experiment with single-payer plans.

That’s an especially bitter pill for House progressives, who has won support for state-based experimentation in committee votes.

Groups such as Progressive Democrats of America were quick to raised alarm bells because some of the most innovative responses to the health-care crisis are being forged at the state level. While single-payer proposals are being blocked at the federal level, PDA national director Tim Carpenter says the single-payer fight is ramping up in the states.

“Last week, members of the PDA national team traveled to Pennsylvania for a rally at the capital rotunda in Harrisburg, in support of Healthcare for All Pennsylvania and their single-payer bill,” notes Carpenter. “The momentum for single-payer healthcare grows daily. It appears Congress will have to be forced to follow the lead of states like Pennsylvania, California, Illinois, Ohio and Massachusetts — all working to implement single-payer healthcare at the state level.”

House progressives were quick to express disappointment, as they were counting on the House to advance a strong alternative to the Senate Democratic leadership’s very weak public option proposal — which would allow states to opt out of the plan.

Reviewing the details of Pelosi’s plan in a passionate speech on the House floor, Ohio Congressman Dennis Kucinich, one of the chamber’s most ardent advocates for reform asked: “Is this the best we can do? Forcing people to buy private health insurance, guaranteeing at least $50 billion in new business for the insurance companies?

Kucinich continued:

Is this the best we can do? Government negotiates rates which will drive up insurance costs, but the government won’t negotiate with the pharmaceutical companies which will drive up pharmaceutical costs.

Is this the best we can do? Only 3 percent of Americans will go to a new public plan, while currently 33 percent of Americans are either uninsured or underinsured?

Is this the best we can do? Eliminating the state single payer option, while forcing most people to buy private insurance.

If this is the best we can do, then our best isn’t good enough and we have to ask some hard questions about our political system: such as Health Care or Insurance Care? Government of the people or a government of the corporations.

Congressional Progressive Caucus co-chair Lynn Woolsey, D-California, said she and her allies would continue to battle to muscle-up the public option.

“It’s not even the fourth quarter,” said Woolsey, who noted the public option had only recently been dismissed as dead by many pundits. “We will be insisting on (the option) being as strong as it possibly can be.”

Woolsey and other progressive Democrats are set to meet with President Obama Thursday.

“He needs to hear from us that he needs to support the public option,” Woolsey told the Los Angeles Times. “He’s not saying it loud enough. We want to make sure he lets the Senate know he wants a public option in the bill.”

The focus on Obama is appropriate. He has the authority, as a man with a bully pulpit and a veto pen, to tell Pelosi that a soft public option is insufficient. At the same time, he can and should be more involved in challenging the absurd proposals — advanced by conservative Democrats and moderate Republicans — for “opt-outs” and “triggers,” which threaten to weaken the public option to the point of meaninglessness.