SCENARIOS-Obama, Democrats face choices in health overhaul

WASHINGTON, Sept 7 (Reuters) - As U.S. President Barack Obama starts a final push for healthcare reform he must settle a central dispute over the government's role in providing affordable health coverage to the 46 million uninsured.

Liberal Democrats want a new government-run insurance program. Most Republicans and insurance companies oppose the idea. The White House is scrambling to sketch out a possible compromise, working with Republican Senator Olympia Snowe from the moderate wing of the party who holds a swing vote in the Democratic-controlled Senate.

The following are some scenarios on what might happen:

WAIT FOR SENATE FINANCE

Obama could wait for the "Gang of Six" members of the Senate Finance Committee to complete negotiations aimed at producing a bipartisan package. The group, which includes Committee Chairman Max Baucus and Senator Charles Grassley, the panel's top Republican, faces a Sept. 15 deadline to produce a bill that is not expected to include a public plan. They have said they will meet on Tuesday "to take stock of where we are and determine how best to pass real reform."

The White House and many Democrats appear to be giving up hope the talks will produce an acceptable compromise given recent sharp criticisms of Obama's proposals by Grassley and Republican Senator Mike Enzi, another of the negotiators.

Even if the group produces a compromise, it is not clear liberal Democrats will accept it. Instead of a public plan, the Senate Finance bill is expected to provide for the creation of nonprofit medical cooperatives to compete with insurers.

PUSH AHEAD WITH ONLY DEMOCRATS

Obama could try to push legislation that includes a public plan through Congress with just Democratic support. But that will be difficult even though the party holds strong majorities in the House and Senate. He needs 60 Senate votes to overcome procedural hurdles put up by Republicans who strongly oppose the overhaul plan.

With the death of Senator Edward Kennedy, Democrats control only 59 of the Senate's 100 seats. But some moderate Democratic senators have problems with the proposed public health plan and are sensitive to opposition arguments it would result in a government takeover of healthcare and larger budget deficits.

FIND MIDDLE GROUND

The White House does not want the debate over the public plan option to bring down the whole reform effort and is reaching out to Snowe for a possible compromise. Snowe is one of only three Republicans who backed Obama's $787 billion economic stimulus plan in February and now holds a crucial vote on healthcare. She has proposed a compromise that would "trigger" the creation of a new government plan if proposed insurance industry reforms fail to meet quality and affordability benchmarks.

If the White House makes a deal with Snowe, her fellow Maine Republican Senator Susan Collins might also back it and centrist Democrats would find it easier to support.

Liberal Democrats, who see a new government plan as central to reform, dislike the compromise. House Speaker Nancy Pelosi warned insurers at a news conference on Wednesday that if Democrats go along with the idea, it would trigger "a very robust public option."

OTHER COMPROMISES

Obama may also have to compromise on other parts of the reform plan, including dropping a proposal to allow Medicare, the government health insurance program for the elderly and disabled, to reimburse doctors who provide end-of-life counseling to patients who request it. The provision sparked talk of "death panels" and doctors talking the elderly patients into suicide.

Obama may also have to compromise on how to pay for the package, which could cost $1 trillion over 10 years. He has called for limiting tax deductions for the very wealthy. The House bill includes a 5.4 percent tax on millionaires, while the Senate Finance Committee is considering taxing high-end health insurance policies.

Democrats may also have to reduce the bill's cost by scaling back plans to cover all Americans and settle on expanding access to health coverage without requiring individuals and businesses to purchase insurance.