Obama defends healthcare plans, criticizes insurers

By Jeff Mason and Matt Spetalnick

GRAND JUNCTION, Colorado (Reuters) - U.S. President Barack Obama reignited his criticism of health insurance companies on Saturday, promising reforms that would prevent firms from capping coverage or charging "outrageous" fees.

Traveling to a conservative area of Colorado, a western state that supported Obama in the 2008 election, the president continued his assault on companies that the White House has painted as being at the root of the country's healthcare woes while defending his proposals to fix the system.

"Insurance companies will no longer be able to ... place an arbitrary cap on the amount of coverage you can receive or charge outrageous out-of-pocket expenses on top of your premiums," Obama told the crowd of roughly 1,500 people.

"No one in America should go broke because they get sick," he said to loud applause.

The town hall style meeting -- the third this week for Obama, whose public poll numbers are dipping as Americans worry about his expensive plans to reform the healthcare industry -- grouped supporters and critics in a mostly civil, friendly atmosphere.

One university student challenged Obama to explain more clearly how private insurers would be able to compete against a public entity with government backing, which Obama supports.

"The notion that somehow just by having a public option you have the entire private marketplace destroyed is just not borne out by the facts," Obama said, adding the proposed non-profit entity would also have to compete for favorable interest rates and collect premiums to be competitive.

Protesters and supporters lined up outside the school where the event took place, replaying scenes from other healthcare events across the country.