Obama: Tough talks ahead as health reform advances

By David Alexander and Donna Smith

WASHINGTON (Reuters) - House leaders worked on Friday to stem a Democratic rebellion over healthcare reform and President Barack Obama predicted tough negotiations ahead as lawmakers announced plans to move forward with the bill.

Committees in the House of Representatives planned to introduce the healthcare overhaul on Monday and consider amendments later in the week, even as they looked for new ways to cover the cost of the expected $1 trillion 10-year plan.

Representative Charlie Rangel, head of the House Ways and Means Committee, said the bill included a tax on Americans earning more than $350,000 per year that would raise $540 billion over 10 years. The tax would begin in 2011 and have higher rates at the $500,000 and $1 million income levels.

The United States spends more than $2 trillion annually on healthcare, twice any other nation, but it ranks worse than most developed countries on many measures of health, including life expectancy.

Some 46 million are uninsured and have little access to routine healthcare, relying instead on costly emergency room visits as need arises. Obama wants Congress to send him a healthcare bill by October that will cover the uninsured while lowering costs.

House leaders met with representatives of the fiscally conservative Blue Dog Democrat coalition on Friday, hoping to tamp down a rebellion after 40 members sent a letter expressing "strong reservations about the process and direction" of the healthcare plan.

While Democrats control the House, the loss of 40 of their own could put passage in jeopardy, as Republicans have not been involved in the talks and thus may not be cooperative when Democrats knock on their doors for votes.

The group warned the cost of the proposed reform was unsustainable and took aim at Obama's push for a public insurance plan to compete with private insurers, saying it would "seriously weaken the financial stability of our local hospitals and doctors."