Democrats opened difficult talks on healthcare reform in the U.S. Senate Wednesday, promising to bridge party divisions on a government-run insurance plan and paying for the overhaul.

Democratic leaders met to discuss the best way to merge two Senate proposals on healthcare while keeping party liberals, moderates and key Republican Senator Olympia Snowe happy.

Snowe became the first Republican in Congress to support a Democratic healthcare reform plan when she voted for the bill in the Senate Finance Committee Tuesday.

I know this isn't going to be easy, Senate Democratic leader Harry Reid said before the talks, which included White House officials. Legislation is the art of compromise.

Senate Republicans demanded Democrats slow down their push for healthcare reform, President Barack Obama's top domestic priority, and allow more time to debate the details of the sweeping plan that would dramatically change the $2.5 trillion health system.

Obama has set the end of the year as his goal for passage of a measure that would begin to slow increases in healthcare costs, regulate the insurance market and expand health coverage without increasing the budget deficit.

Senate Republicans are going to insist that this be a real Senate debate, a multi-week debate that gives everyone on both sides an opportunity to freely amend this measure, Senate Republican leader Mitch McConnell said.

Reid said there would be plenty of time to analyze the measure and questioned the motives of Republicans. They would rather never have a vote on this, he said.

The public insurance option looms as one of the biggest sticking points as Reid merges the bill produced by the Finance Committee with one passed earlier this year by the Senate health panel.

The health bill includes the option, backed by Obama and liberal Democrats as a way to create competition in the insurance market, but the Finance bill does not. Three Democrats on the Finance panel voted against the public option in committee.

OTHER DIFFERENCES

Other differences to be hammered out in the bills include whether to require employers to provide health insurance, the amount of subsidies offered to help lower- and middle-income people buy insurance and the taxes imposed to pay for the plan.

Many key provisions in the reform bills would not kick in until 2013, but lawmakers have promised to speed implementation of some aspects of the bill, such as tighter regulations on insurers.

Senate Democrats agreed to seek a quick vote on a separate bill to spare doctors a $247 billion cut in Medicare fees over 10 years. The measure would raise the federal budget deficit but would not count as part of the healthcare overhaul and would lower its price tag.

Finance Committee Chairman Max Baucus, who joined Senator Chris Dodd of the health panel in the talks with Reid, said he was optimistic they would produce a bill that could gain the 60 votes needed to overcome Republican procedural hurdles.

There may be some minor differences but that is so so small it pales in comparison to how strongly we are working together, he said. We're going to get a good solid bill passed that addresses our objectives and gets 60 votes.

Baucus and Obama had wooed Snowe for months, hoping she could be a swing vote in the Senate -- where Democrats control exactly 60 votes -- and even bring along one or two Republican colleagues.

Susan Collins, Snowe's fellow Republican moderate from Maine, said she thought the Finance committee bill was an improvement on the Health committee's plan but still fell short. She offered some hope for Democrats that she could be won over.

There are a number of senators from both sides of the aisle who think that the Finance Committee bill is the best of the options put out so far but still isn't where it needs to be. I am in that group, she said.

Democratic leaders in the House of Representatives also are trying to develop a single bill from three separate healthcare measures as the debate over Obama's top domestic priority moves to a bigger stage.

Democratic House Leader Steny Hoyer said he did not expect a House vote on healthcare reform by early November.

The insurance industry, labor unions and other outside groups have cranked up their opposition to the Finance proposal ahead of the full Senate and House taking up the issue in the next few weeks.

Senate Democrats said they expect the final bill would be adjusted to ease union concerns about a tax on expensive healthcare plans, which includes some union plans.

We don't like our friends in labor not supporting our effort, Senator Dick Durbin said. We would like to have a combined unified effort. I think at the end of the day we will.

Reid fought back against the insurance industry at a Senate hearing designed to examine its anti-trust provision. There is no reason why insurance companies should be allowed to form monopolies and dictate health choices, Reid said.

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