Obama seeks to push healthcare to final vote

Although much uncertainty remains on the path to passage of the legislation, Obama opposed Republican calls to throw out broad bills passed by the House of Representatives and Senate last year and begin again with a more step-by-step approach.

Americans are waiting for the administration to lead, Obama said in remarks at the White House backing a muscle tactic known as "reconciliation" as a way of overcoming rock-solid Republican opposition.

Republicans dismissed Obama's comments and said Democrats risked paying a price in mid-term congressional elections in November. "Every election in America this fall will be a referendum on this issue," Senate Republican leader Mitch McConnell said.

Wall Street shrugged off Obama's statement.

"It doesn't really seem like there's any change here. Basically, what it was was a call to action," said Steve Shubitz, a healthcare analyst at Edward Jones. "There really wasn't much new in there, meaning nothing incrementally more damaging to the health insurance companies," he said.

"My opinion it's still just political maneuvering on healthcare ... I'd be surprised if anything does get done," said Wayne Schmidt of Minnesota-based Gradient Investments.

The Morgan Stanley Healthcare Payor index of health insurer stocks was up about 1 percent on Wednesday.

ANOTHER YEAR WOULDN'T HELP

"Now is the time to make a decision about how to finally reform health care so that it works, not just for the insurance companies, but for America's families and businesses," Obama said in his speech.

He said his plan included ideas from both his fellow Democrats and rival Republicans, who staunchly oppose the idea of a large-scale overhaul of the $2.5 trillion healthcare industry, which accounts for one-sixth of the U.S. economy. Republicans say such a plan is too expensive for a government running huge budget deficits.

Obama renewed his effort to win Republican backing with a healthcare summit last week and a letter on Tuesday outlining some of their ideas he was willing to adopt. Obama said he was open to Republican ideas such as probing healthcare providers who get federal money and offering more grants to study alternatives to medical malpractice suits.

With those efforts, he can say he gave bipartisanship another chance, even as Democrats seek to bypass Republicans.

"Given these honest and substantial differences between the parties ... I do not see how another year of negotiations would help," Obama said.

White House spokesman Robert Gibbs said Obama will push hard. "Whatever it takes to get healthcare done," he said. Obama is due to travel to Philadelphia and St. Louis next week to make his case for the overhaul.

Democrats have been preparing to pass a final measure in the Senate without opposition support through reconciliation, which requires only simple majority approval instead of the usual 60 votes that are needed in the 100-member chamber to overcome procedural hurdles. The Democrats lost their "supermajority" with the loss of a Senate seat in a special election in January.

Obama did not use the word reconciliation, a term not understood by many Americans, but made clear he supported that process with comments urging an up or down vote in Congress.

"No matter which approach you favor, I believe the United States Congress owes the American people a final vote on health care reform," he said.

POLITICAL STAKES ENORMOUS

The political stakes are enormous. Obama's approval ratings have dropped during the healthcare fight amid public worries about an unemployment rate hovering around 10 percent.

With polls providing a mixed picture of their attitudes, the president made clear he was willing to let voters decide in November whether healthcare should be approved or not. With more than one third of the Senate and all seats in the House up for grabs, his fellow Democrats want to move past healthcare to focus on job creation and the economy.

It is unclear whether Speaker Nancy Pelosi will be able to muster a bare majority of 216 Democrats to pass the plan in the House, with moderates fearing a rebellion from voters more concerned about jobs.

The House approved its version in November with only three votes to spare, and will take up a Senate version that includes several provisions House Democrats do not like. Those include a tax on high-cost "Cadillac" insurance plans and lower federal subsidies to make insurance more affordable.

Obama has offered proposals to ease some House concerns, watering down the tax on expensive insurance plans and boosting federal subsidies. It is those items that will be taken up through reconciliation.

But reconciliation cannot be used to change a Senate provision that weakened language banning the use of federal funds for abortion, and as a result Democratic Representative Bart Stupak said he will vote against the bill -- and he says as many as a dozen other Democrats might too.

Using reconciliation to pass a final bill would be a two-step process. The House would approve the Senate-passed bill and changes to the Senate bill sought by the House would be passed separately through reconciliation.

(Additional reporting by Steve Holland, Ross Colvin, Jeff Mason and John Whitesides in Washington and Lewis Krauskopf in New York; editing by Philip Barbara)