UPDATE 3-With Kennedy's help, Senate passes Medicare bill

(Updates with Kennedy quote in paragraph 4)

By Kim Dixon

WASHINGTON, July 9 (Reuters) - A Medicare bill opposed by the White House won final congressional approval on Wednesday with the help of Sen. Edward Kennedy, who returned to the Senate floor for the first time since brain surgery last month.

With Kennedy's dramatic and surprise appearance, he and fellow Democrats overcame a Republican procedural hurdle and, on a voice vote, passed the measure earlier approved by the House of Representatives.

"Aye," declared a smiling Kennedy of Massachusetts -- a Democratic icon, the party's leading liberal voice and a longtime champion of expanding health care. Democratic as well as Republican colleagues applauded.

"Win, lose or draw, I wanted to be here. I wasn't going to take the chance that my vote could make the difference," Kennedy said after the vote.

The bill would cancel a scheduled 11 percent pay cut to doctors who treat Medicare patients. It is largely funded by cutting about $13 billion in reimbursements to insurers such as UnitedHealth Group Inc (UNH.N: Quote, Profile, Research) and Aetna Inc (AET.N: Quote, Profile, Research) that contract with the Medicare program.

The Bush administration opposes any effort to trim payments to private health plans. The president has said the move would limit plan choices for seniors. But doctors and the seniors' group AARP waged an aggressive lobbying effort to prevent the doctors' pay cut.

"This is pretty much a done deal. The president is not going to win this fight," Ipsita Smolinski, a health care analyst with JP Morgan, said after the Senate vote.