WASHINGTON - House of Representatives Speaker Nancy Pelosi said on Tuesday new estimates showed a healthcare overhaul drafted by Democrats would reduce the U.S. budget deficit over 10 years and cost less than $900 billion.

The preliminary estimates from the nonpartisan Congressional Budget Office moved Democratic leaders closer to finishing a merger of three separate healthcare reform bills into one for debate on the House floor.

The budget watchdog had been asked to analyze a healthcare bill with three different versions of a government-run insurance option as leaders worked to merge bills on President Barack Obama's top domestic priority.

The preliminary estimates we've seen from the CBO enable us to make our choices knowing that whatever choice we make will reduce the deficit and will pay for the bill, said Pelosi, who did not release the estimates.

We're very excited by the CBO scores, she said, predicting House Democratic leaders would finish their work on the merger soon.

The three bills passed this year all included a government-run public insurance option and were above $1 trillion in cost.

Pelosi said Democratic leaders would not bring forward a bill that did not meet Obama's goal of $900 billion and has repeatedly said the final House bill will include a strong government-run health insurance option.

She asked CBO to provide estimates on three versions of the option -- one based on reimbursement rates paid to healthcare providers under Medicare and two that would rely on reimbursement rates negotiated with the providers.

Pelosi said House leaders were still waiting on some information on one of the options, but all three would be under $900 billion.

We're in an excellent place with the cost, given the information that we have, she said.

(Editing by David Alexander)

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