Montana – President Barack Obama said on Saturday U.S. healthcare worked better for insurance companies than for patients, as he pressed his case for a major overhaul that critics say is too expensive.

Obama, who is in the middle of a multi-state tour to promote his healthcare policies, also accused special interests of misleading Americans about aspects of the reform bills making their way through Congress.

These are the stories that aren't being told - stories of a healthcare system that works better for the insurance industry than it does for the American people, Obama said in his weekly radio address, referring to people he has met who have struggled with the current system.

And that's why we're going to pass health insurance reform that finally holds the insurance companies accountable.

In recent days, the president, a Democrat, has stepped up his attacks on insurance companies, saying they bear much of the blame for the country's healthcare problems.

On Friday, the first day of a Western trip designed to shore up crumbling support for his top domestic priority, Obama told a town hall meeting-style event insurance firms were holding the country hostage.

He will hold a similar event in Grand Junction, Colorado later on Saturday.

Without naming her, Obama also accused former Alaska Governor and Republican vice presidential candidate Sarah Palin as well as other critics of spreading false information.

The history is clear - every time we come close to passing health insurance reform, the special interests with a stake in the status quo use their influence and political allies to scare and mislead the American people, Obama said.

He debunked, again, a rumor that one of the bills working its way through Congress included a provision to create government-run death panels to decide whether senior citizens live or die.

In fact, the provision would have provided insurance coverage for patients who wished to discuss end-of-life issues such as hospice care with their doctors.

Palin had referred to that process as death panels.

When folks with a stake in the status quo keep inventing these boogeymen in an effort to scare people, it's disappointing, but it's not surprising, Obama said.

Republicans and some Democrats have also raised concerns about the cost of the nearly $1 trillion overhaul to extend coverage to millions of uninsured Americans. Obama repeated on Friday his promise not to raise taxes on Americans making $250,000 a year or less in order to pay for the overhaul.

(Editing by Alan Elsner)

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