Democratic leaders in the U.S. House of Representatives briefed party members on Thursday on healthcare talks with the Senate, with competing approaches on taxes and the shape of new insurance exchanges topping the list of priorities.

About 175 House Democrats participated in a conference call with Speaker Nancy Pelosi and other Democratic leaders designed to identify members' concerns as negotiations begin on merging the House and Senate healthcare bills.

Talks on merging the two healthcare bills, President Barack Obama's top legislative priority, began this week. The two bills must be melded into one and passed again by each chamber before Obama can sign it.

House members questioned how to resolve different tax provisions in the bills and competing approaches on preventing the use of federal funds for abortion, along with ways to hold down costs for middle-class Americans, participants said.

There are concerns people are having when they are hearing from constituents about these issues, Representative Rosa DeLauro told reporters after the meeting.

The overhaul would lead to the biggest changes in the $2.5 trillion U.S. healthcare system in four decades.

Both bills would extend insurance coverage to more than 30 million uninsured Americans, create exchanges where individuals can shop for insurance plans and halt practices such as refusing insurance to people with pre-existing conditions.

Democrats must keep each member of their fragile 60-vote Senate caucus together to muscle the bill through over unified Republican opposition, meaning the final version is expected to hew closely to the Senate bill on crucial points.

The competing tax approaches to raise money for the changes and the different structures of the exchanges are emerging as two of the most difficult problems, House members said.

Many House Democrats and labor unions strongly oppose a Senate proposal, backed by Obama, to tax high-cost insurance plans. One potential resolution would be raising the threshold at which the tax kicks in to try to ensure it does not affect middle-class Americans.

NO DECISIONS

House leaders said it was too early to say whether they would be forced to yield on the issue.

They want to know, has anything changed, have any concessions been made, and we said 'no,' Representative George Miller, chairman of the House Education and Labor Committee, told reporters.

Obviously, no decisions have been made on any of this.

The House bill would create a national exchange to purchase insurance, while the exchanges would be state-based under the Senate bill. House members said the national exchange would provide more protection for consumers in the market.

The national exchange is something that people want to make sure of, that builds in the mechanism for lowering cost, for accountability, for competition, DeLauro said.

Members also asked about the abortion language in the two bills. The Senate bill includes a provision, negotiated by Democratic Senator Ben Nelson of Nebraska, that is less restrictive than the House measure.

A large bloc of House Democrats forced the tougher restrictions on the use of federal funds for abortion before they would back the House bill, which passed on November 7 with only two votes to spare.

A House aide said a provision in the Senate bill pushed by Nelson that exempted Nebraska from paying for an expansion of Medicaid, the federal health program for the poor, also came up in the meeting.

Pelosi told members she would fight to ensure all states were treated equally under the final bill, the aide said.

Nelson said on Thursday he was talking to Senate leaders about changing the Medicaid provision and ensuring all states were treated the same.

House members return from a holiday recess next week and Democrats will meet on Tuesday to discuss their strategy. Obama will meet with House Democrats later in the week.

The U.S. Senate does not return to Washington from its holiday break until January 20.

Nancy Pelosi Barack obama