The emerging fault line betwen the parties is the mostly Democrat-backed idea of creating a public insurance plan to compete with private insurers. Proponents and foes of the government option are beginning to raise their voices more forcefully and frequently .

Health Care for America Now, a national advocacy group that favors a public plan, hits the Iowa airwaves Saturday with a four-day ad buy aimed at Iowa Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee who is increasingly vocal in his opposition to the government insurance option.

Critics say he pierced the air of collegiality at the White House Forum on Health Care earlier this month by telling President Barack Obama that government is “an unfair competitor,” and could run private insurers out of business.

“He was the only one who injected that deep policy disagreement,” said Steven Kreisberg, director of health care policy for the American Federation of State, County and Municipal Employees. “It was a wake-up call to people on both sides to begin the discussion.”

Proponents say giving Americans the option of buying medical coverage through a government plan would make insurance more affordable, and insurers shouldn’t be entrusted in reforming a system they created. Opponents argue it would be the first step towards nationalized health care.

For those most invested—insurers and Republicans on one side, labor and Democrats on the other—the public plan debate is viewed as crucial to determining the level of bipartisan support for the bill, or whether it even passes. Obama supported a public insurance option during the campaign, but he has remained neutral since taking office to keep all parties talking.

There are signs in recent weeks that it won’t be easy to keep everyone at the table.

Senate Republicans laid out their opposition to the public plan in a letter to the president, and the House GOP ripped the idea in its weekly radio address.

AFSCME recently pulled out of a broad coalition of insurers, business and consumer advocates seeking consensus on a way forward on health care—eliminatingone of the few forums in which labor and business were at the same table to work out their differences.

Grassley, who has been participating in bipartisan negotiations with Senate Finance Chairman Max Baucus (D-Mont.), took his criticism a step further this week. He said he could not predict a situation in which Republicans could agree to legislation that created a public insurance option. But he also declined to definitively rule it out.

“I don’t see a compromise, but I am going to take the same approach the president takes because I want to see what’s possible,” Grassley told reporters at a briefing organized by the Kaiser Family Foundation.

Health Care for America Now is running the $20,000 TV ad buy on statewide cable networks to coincide with a White House regional health care forum scheduled for Monday. Grassley is expected to attend the event.

“Private health insurance companies have been in control for too long,” an Iowa nurse says in the ad. “They decide who you can see, what’s covered and what’s not. What if you had a choice? Keep your private insurance or join a new public health insurance plan with good benefits and a price you can afford so we are not at the mercy private insurance companies making decisions you and I should be making for ourselves.”

The ad is part of broader campaign, which will include national advertising and grassroots advocacy, to push the public plan with voters, HCAN spokesman Jackie Schechner said.

“It is a priority, to get people to understand,” Schechner said.

They will need to focus on the Senate, where Democrats need at least two Republicans to help them clear the 60-vote threshold to break a filibuster.

Sen. Ron Wyden (D-Ore.), who has filed the only health care reform bill with Republican cosponsors, said he spoke with 85 senators as he developed his proposal over the last few years—and found no GOP support for a plan that included a government option.

“From a raw political standpoint, having talked to a lot of senators, I wouldn’t have any Republicans on the Healthy Americans Act as cosponsors if we had a public option,” Wyden told POLITICO this week.